The Gas Station Argument: Why Direct Competition Leads To Different Prices

Hafsah

Writer. A Caffeine dependent life-form. Original Hopeful Rational Inquisitive IngeniousPhotographer Sailor Philosopher Happy. Serial Chips and Salsa Eater.Curious and ambitious. In-between sofa cushions.

 

 

Fields. Rural towns. Big cities. Different gas stations charge different prices. This is a simple principle in economics. Price elasticity of demand. To Calculate elasticity of demand, we divide the % change in quantity by the % change in price. Highly elastic demand (a big quantity response to a price change) suggests there are overflowing obtainable alternatives. If the price of one brand of pencil soars, we’ll all just buy other writing implements and no one’s much worse off. Inelastic demand means that consumers have few good alternatives in the face of a price increase, but to continue buying as they had before.

The type of petrol station

One thing to note is that stations that might be across the street from each other could pay vastly different amounts for the fuel they sell. There is a difference between a branded station and an unbranded station. A branded station will order their gas from their corporate parent – a Chevron station, for instance, will get their gas from the Chevron rack at their local fuel terminal.

An unbranded/independent station has a much wider range of fuel they can buy, and usually get quotes from multiple fuel marketing companies (sometimes called “jobbers”.) The station will buy the fuel from the marketer, who transports the fuel from the rack (or their storage) to the station. The price the station pays includes freight charges and other fees the marketer can charge.

Sometimes, an unbranded station might have to pay more for the fuel they sell. It also works out that an unbranded station might be able to play the spot fuel market and take advantage of oversupply and pay less than their branded counterparts. 

In addition to the commodity cost of the fuel they buy, underlying infrastructure costs, credit card processing fees and factors like whether the station has a convenience store can affect the price they charge. (Since the station can make a higher margin if you come inside and buy products, they can sometimes offer their fuel for a discount and make less margin on that.)

There are sharp differences in elasticities across nations. In the short run, demand for petrol in America is almost perfectly inelastic. Demand responses in Europe in the short run are far more substantial. Consumption response grows over time. Oil prices have increased steadily for most of the decade now, and the current spike is about a year old. No surprise, then, that petrol purchases are falling, even in automobile dependent America.

If a petrol station is close to another one then there is greater competition between those outlets than an isolated forecourt.
  • Motorway fuel stations are considerably more expensive because of their convenience and most are open 24 hours a day.
  • Some petrol stations in the UK are run as franchises which mean that although they may carry the brand name of a big oil company they may operate independently and be owned by individuals rather than the company themselves.
  • This means that individual forecourt managers are free to set their own prices.

Different areas and different prices.

Prices are usually higher in rural areas where there are less competition and fewer customers. Petrol stations in those areas are also more likely to be run by smaller, independent retailers, who have to charge more to cover business costs.The cheapest prices are found in major cities, where petrol stations have to compete for customers. They are also more likely to be run by big companies – like supermarkets – who can offer more competitive rates.

Supermarkets use motor fuel to promote the rest of their business, so they hide the cost in other goods they sell. Local services are often seen as not being as cheap as supermarkets, but people don’t do all the sums. In rural areas, fewer people means there will be fewer sales, whereas in urban areas more people mean more sales. It is supply and demand.

Catalyst, an analyst which collects information on the retail petrol market in Western Europe, agrees that supermarkets drive competition in cities and keep prices lower than other areas.

Supply and demand

An oversupply occurs when there is more oil on the market than people are consuming.

This lowers the price of oil and often those savings are passed on to motorists at the browser.

NRMA spokesman Peter Khoury said the latest dip in Australian petrol prices was down to a combination of international conditions including an oversupply of oil from the United States and Saudi Arabia.

Top 5 Things To Know About The Oil Market

David McDonald

David McDonald

David is a 19-year-old Canadian student currently attending the University of Guelph. He currently studies Public Management and economics with hopes of one day becoming an accomplished journalist. David enjoys reporting on global events and actively try to make a difference in the world.
David McDonald

Actions taken by industrialized nations to lessen global warming by curtailing the use of fossil fuels gained momentum in June 2015.

The leaders of the G7 industrialized nations issued a communiqué calling for the phasing out of petroleum-based energy by the end of the century. Six months later, nearly 200 nations at the COP21 summit in Paris agreed to a goal of limiting global temperature increases to less than two degrees Celsius above pre-industrial levels and to reach net-zero greenhouse gas emissions in the second half of the century.

This deal appears to represent a collective commitment by nations large and small to move away from fossil fuel production and consumption. This anticipated outcome of the meeting did not deter the CEOs of 10 of the world’s largest O&G companies (BG Group, BP, Eni, Pemex, Reliance Industries, Repsol, Saudi Aramco, Shell, Statoil, and Total) from declaring their support for what became the COP21 targets a month before the Paris meeting.

Given the reality of diminished fossil fuel use in the future — and the gradual acceptance of that reality in the energy industry — a slew of questions immediately arise. Will upstream oil companies end up with stockpiles of “unburnable” petroleum reserves? If so, should they abandon all exploration activity? Will downstream refiners need to rejigger their configurations to accommodate more biofuels and emission abatement technologies? Will natural gas–focused companies be better positioned to manage the transition to a low-carbon economy? Let’s aim to answer a few of these questions.

1. Oil is necessary for our global energy supply.

Though there are many environmental agencies that are pushing sustainable energy, oil still accounts for a third of the energy usage throughout the entire world. Because of this, a lack of oil would significantly destabilize many countries. Though sustainable energy may be an option for the future, it is not currently available enough to be relied upon. A lack of oil would be disastrous throughout the globe. This is true not only because of the energy market but also because of local and global economies.

2. OPEC still controls much of the oil supply and cost.

Oil and natural gas is as much political as it is economic. OPEC is a conglomerate of oil producing countries which have traditionally controlled the oil market, thereby “fixing” the price and controlling other national economies.

The United States is presently fighting against OPEC in order to achieve full energy independence and to reduce reliance upon foreign oil. Without the domestic oil market, OPEC would be free to control a much greater share of the entire world’s energy. As noted, oil is necessary for our global energy supply. Without domestic sources of oil, OPEC becomes incredibly dangerous.

3. Oil production reduces gasoline costs.

This is more important than it might at first seem. Traditionally, reduced gasoline costs are directly related to improved economies. The cheaper gasoline is, the cheaper everything is; shipping, travel, and transportation all become far more affordable. Because of this, we can see that as the oil and gas market builds, local economies and the national economy also recover. If oil production wanes (and prices increase), we may likewise see a slowdown in the economy.

4. Oil is an incredibly efficient energy source.

The problem with renewable energy isn’t just about volume, it’s also about power. Solar energy is much weaker than oil power. Even advances within solar technology have not been able to make it a viable contender. Because of this, many companies are now focusing on improving upon their uses of oil and natural gas, rather than trying to eliminate them entirely. Switching to alternative methods of power such as solar and wind power simply is not feasible for the majority of the world.

5. Oil availability is constantly growing.

Oil has long been known as a non-renewable resource, but that doesn’t mean that the supply is dwindling. On the contrary, the availability and supply of oil has been steadily growing. Methods such as hydraulic fracturing have made supplies of oil that were previously unable to be claimed available to be produced. Moreover, advances in technology have made it easier to claim oil from previously depleted wells. Because of this, the actual amount of oil we are able to produce and use is increasing rather than decreasing.

Palm Oil Plantations: An Economic Perspective

David McDonald

David McDonald

David is a 19-year-old Canadian student currently attending the University of Guelph. He currently studies Public Management and economics with hopes of one day becoming an accomplished journalist. David enjoys reporting on global events and actively try to make a difference in the world.
David McDonald

Overview

Palm oil is an edible vegetable oil derived from the mesocarp of the fruit of the oil palms, and it is very profitable.
 
Its production is also highly dangerous to the overall health of our planet, as well as the ecosystems that are destroyed by palm oil cultivation. In hindsight, palm oil is the most commonly produced vegetable oil on the planet, with 66 million tonnes being produced annually – most of which is being made in very poor areas, but I’ll get into that later.
 
Palm oil is currently being used in nearly, “half of all supermarket products” and has a market value north of $60 billion, a figure that is expected to grow to upwards of $88 billion by 2022, as stated by a report by Grand View Research, Inc. This commodity is important, It is highly economical, and production will not slow down anytime soon, which has many people worried.
 

Assessing The Environmental Impact Of Mass-Scale Palm Oil Production

History of palm oil production can be traced back to Western Africa and Ancient Egypt about 5,000 years ago – Commercial use was first established in Malaysia in 1917. It was one of the earliest traded commodities, which proves its worth to human civilization. However, human population has risen by nearly 6 billion since then, which has resulted in a massive jump in the production of palm oil.
 
Oil palm plantations currently cover more than 27 million hectares of the Earth’s surface. Forests and human settlements have been destroyed and replaced by “green deserts” containing virtually no biodiversity on an area the size of New Zealand. Most of the world’s palm oil is being produced in Malaysia and Indonesia, who collectively produced 53.3 million tonnes of palm oil.
 
top palm oil producers globally
 
 
“The warm, humid climate of the tropics offers perfect growth conditions for oil palms. Day after day, huge tracts of rainforest in Southeast Asia, Latin America, and Africa are being bulldozed or torched to make room for more plantations, releasing vast amounts of carbon into the atmosphere. As a consequence, Indonesia temporarily surpassed the United States in terms of greenhouse gas emissions in 2015. With their CO2 and methane emissions, palm oil-based biofuels actually have three times the climate impact of traditional fossil fuels.”

Palm oil is not only bad for the climate: As their forest habitat is cleared, endangered species such as the orangutan, Borneo elephant, and Sumatran tiger are being pushed closer to extinction. Smallholders and indigenous people who have inhabited and protected the forest for generations are often brutally driven from their land. In Indonesia, more than 700 land conflicts are related to the palm oil industry. Human rights violations are everyday occurrences, even on supposedly “sustainable” and “organic” plantations.

global carbon emissions by category
As pictured to the left, deforestation accounted for 16.3% of all Global GHG (Greenhouse Gas) emissions in 2005 (This is a lot of CO2).
 
So not only are ecosystems being destroyed, but our planet is slowly deteriorating just so corporations can make a buck, and because we (the average consumer) want to enjoy our favourite goods.
 
According to UCSUSA.ORG, “From 2001 to 2010, land-use carbon emissions from palm oil in Indonesia averaged 216 to 268 million tons—that’s equivalent to the emissions from 45 to 55 million cars, 56 to 70 coal-fired power plants, or the annual energy use from 20 to 25 million homes.” They go on further to describe how demand for palm oil continues to rise at an alarming rate: “Between 1990 and 2013, global production of palm oil more than quadrupled, rising from 14.5 million tonnes to 67.3 million tonnes.”
 
The realisation of all of this is that it’s sad. It’s sad that we have reached a point where most (if not all) of what we consume is harmful to the planet in one way or another. It hurts to say, but my carbon footprint as a first-class Canadian citizen is enormous. The amount palm oil that exists in the goods I consume on a daily basis (let alone a lifetime) is shocking, to say the least.
 
production process for palm oil
Above I created a diagram that shows every step in the production and consumption process for a package of instant noodles (The most traded product that contains palm oil). This process can be applied to literally anything that contains palm oil, is sold in a store, and does not have eco-friendly compostable packaging. Here’s the process explained:
 
  1. Every palm oil plantation begins with what once was a beautiful forest with a fully functioning eco-system.
  2. The forest gets bulldozed to make a palm oil plantation.
  3. Palm oil is extracted: Throughout the monthly process it takes to cultivate the trees, water is being used to maintain them (a lot of water).
  4. Palm oil product is packaged: Is mainly packaged in plastic, which in itself, releases CO2 into the atmosphere when produced.
  5. Palm oil is transported: CO2 is released into the atmosphere and oceans by burning fuel.
  6. Palm oil product is stored: Electricity, heat, and coolers must be used in order to store the oil at room temperature.
  7. Product is sold to customer.
  8. Product is consumed: In this case, we purchased instant noodles, which requires a microwave to heat, again, more energy used.
  9. Palm oil product is disposed of: The instant noodles package is thrown in the garbage, where it will soon be tossed in a landfill where it will decompose and evidently, release more CO2 into the atmosphere.
 
Moral of the story: We are all the problem.
 
Many are to blame for the destruction of habitats around the world. However, one could argue that the consumer is the cause for this issue. Me and you, the average consumer that lives in a first-world nation, has a large carbon footprint. Therefore, when the discuss harmful processes like palm oil plantations, we must realize that without a demand for the palm oil product itself there is no market for it to be produced, and thus, there is no deforestation attributed to the product.
 
To further understand this issue, we’ll take a look at the economics of Palm Oil Production.
 

Economies Of Scale: A simple explanation as to why palm oil plantations exist, and why they aren’t going away anytime soon.

According to Investopedia, “Economies of scale is the cost advantage that arises with increased output of a product. Economies of scale arise because of the inverse relationship between the quantity produced and per-unit fixed costs; i.e. the greater the quantity of a good produced, the lower the per-unit fixed cost because these costs are spread out over a larger number of products.”economies of scale for palm oil plantations

The more you produce of something, the cheaper it is to produce. We see this everywhere in every industry possible. From technology production to automobile manufacturing; the bigger the plant, the more profitable your product.
 
Economies of Scale details exactly why deforestation and palm oil plantations are as productive as they are. They take large, generally flat plots of land and clear as much forest as possible to make as large an operation as possible. The bigger the farm, the more money you make from each tree. This concept explains why companies offer ‘two for one’ deals and are constantly enticing you to buy more.
 
This also explains why 87% of palm oil was produced in only two countries last year (Indonesia and Malaysia). Having production of a good centralized is great for profits, and that is exactly what these countries have done. By prioritizing production efficiency, they have been able to sell palm oil at a consistently low price, which has caused the, “demand for palm oil to [rise steadily] since the 1970’s.” (CNN.)
 
Indonesia and Malaysia have eagerly taken advantage of this rising demand for palm oil, and have since, used the commodity as an, “economic pillar.” Indonesia’s GDP Per Capita (average wealth of each citizen) has risen from $2,628 to $3,834 from 2006 to 2015, while Malaysia’s has risen from $8,236 to $10,876 in the same period – much of this rise can be attributed to the production of palm oil. These countries inhabitants still remain generally under the poverty line. In comparison, Canada’s GDP per capita is $51,958.
 
The rise of overall wealth within a country cannot be attributed to just one commodity, but it has been proven that Palm Oil has provided a strong basis for many jobs. The President of Indonesia, Susilo Bambang, has stated that economic development within the region will be based on “competitiveness of natural resources management,” in other words, he plans to capitalize on the growing demand for palm oil. Despite the efficiency of these farms, working conditions remain terrible. However, given that these workers are for the most part, living below the poverty line, most industries that will offer them work won’t necessarily have better labour conditions.
In 2008 crude palm oil (CPO) production reached 19.2 million tons and generated US$12.4 billion in foreign exchange from exports for Indonesia, making CPO the most valuable non-oil and gas export last year, the same can be said for Malaysia. It is also important to note that 3.5 million households (about 14 million people) of farmers and employees make a living from oil palms (on the farm). The number of those indirectly involved in the palm oil industry (off farm) is even much bigger.
 
Needless to say, the production of CPO is helping poor countries pull their citizens out of poverty, but it obviously comes with a cost.
 
As terrible as Palm Oil Plantations are, they clearly depict where current markets are, and where the global ideology of consumers currently is. Basic economics states that when there is a demand for a good, someone will meet the supply. Inhabitants of poor, tropical nations spanning the globe have capitalized on their resources to supply a good that is very much in heavy demand. They are satisfying a basic economic model. Although they are damaging the planet whilst doing so, their way of life depends on producing a good, and as long as Western markets demand palm oil, they will continue to produce it for decades to come – it’s the same as any other natural resource that destroys our planet and the fragile ecosystems within it (Crude oil, Coal, etc.)
 
Therefore, the solution to the Palm Oil situation doesn’t come from impoverished nations that have no choice but to produce the good: it comes from us.
 
 

What’s the alternative to palm oil? What can you do to make a change?

When a commodity is mass-produced at a cheap price while severely damaging the environment, it creates a dilemma. In the case of palm oil, we can’t just cold turkey stop buying it, because it’s in basically everything you buy at the grocery store. But we can change consumption patterns.
 
Engineers and scientists have been working on an alternative to palm oil-based products: yeast. They are currently working to produce, “the first yeast-based alternative to palm oil on an industrial scale,” – this could be huge.
 
A team from The University of Bath along with industry partners Croda,  C-Tech, and AB Agri, has been awarded a grant of £4.4m to examine how to produce the oil on an industrial scale. The problem? Price.
 
Alternatives like this are exciting because they don’t force consumers to change buying habits, and they maintain the health of our environment. However, if yeast-based packaged noodles cost 25% more than palm-oil based noodles, it will take a long time for production habits to sway in favour of environmentally-friendly goods.
 
With climate change among other risks to our planet’s health a growing priority, time is not necessarily of the essence. If we are to protect our planet for generations to come, we must act now and actively try to purchase eco-friendly alternatives to our everyday purchases. If you are reading this right now, you are a member of the top 10% of our global population. If you have a computer, and you live in a developed nation, you are lucky. You are in a position where you can actively make consumption choices that better our planet or save your pocket.
 
See, the thing with consumption preferences is that every time we go to the grocery store or a car dealership, we face a tradeoff, an opportunity cost. Do you buy the noodles that are made with yeast-based oil even though they cost 25% more than the palm-oil based ones? Or do you save your money? If you are at a car dealership and you need to choose between two vehicles, do you choose the electric car because you want to save the environment? Or do you choose the sports car because you want to look cool?
 
The everyday choices are yours to make. If you feel passionate about saving our planet, it is up to you to change your consumption habits in a way that fights palm oil production, and it is up to you to spread the word about issues like these.
 

The bottom line is we can all make a change, whether it is a significant change depends on how much money you have, but one thing is for sure; to make a positive change in this world, you must give something up, you must partake in an opportunity cost (which in this case is more money spent on eco-friendly goods) in order to save our planet. We must all take a step back and ask ourselves what we really care about: Our financial well-being or the state of our planet.

A PESTLE Analysis Of The Dakota Access Pipeline

David McDonald

David McDonald

David is a 19-year-old Canadian student currently attending the University of Guelph. He currently studies Public Management and economics with hopes of one day becoming an accomplished journalist. David enjoys reporting on global events and actively try to make a difference in the world.
David McDonald

Introduction

The controversy surrounding the Dakota Access Pipeline has been on the news for quite some time now, and everytime I witness innocent protesters being tear gassed by police, I grow more and more outraged at the idea of the whole situation.
I find the story of the dakota access pipeline one that is of great importance in this day in age. It outlines so many things that are wrong with America, and it also shows how citizens will unite against large corporate powers that only care about profits.
I think it’s amazing to see all of these people to come together to protest the controversial pipeline. However, after months of protesting, it seems not much has changed. I’m still seeing violence on the news surrounding this problem, and construction on the pipeline has not haulted.
So what is really going in in North and South Dakota?
A brief history of oil in the Dakotas
As you already know, oil is very lucrative. Oil creates jobs, oil aids trade surpluses by increasing exports, and oil helps circulate billions of dollars throughout the global financial market every year. Needless to say, whenever new formations of oil are discovered, they will be drilled, and there will be A LOT of money being made throughout the process.
This is exactly what happened in North Dakota back in 2006, when a company by the name of EOG Resources discovered the Parshall Oil Field from the Bakken Formation located across North-Western Dakota.
Inevitably, the discovery of this massive oil formation led to what has been called the North Dakota Oil Boom. This extraction of oil peaked in 2012, and has declined since then due to a global decline in oil prices. Despite the Great Recession, the oil boom provided North Dakota with enough jobs to shrink their unemployment rate to the lowest of any other state in the country. This creation of jobs supplied the state with an effective $ one billion budget surplus. The economy was good — residents were happy.
Realizing the huge economic potential of this newly discovered oil formation, oil companies acted fast to reap the financial benefits awaiting them at this massive oil field. From an economic point of view, this makes sense; when a new natural resource presents itself, there is a large (new) supply for companies to drill, and because the new resource is gasoline, there will always be a consumer demand.
With that being said, many companies raced over to North Dakota, some of the largest being:
  1. Apache
  2. Arsenal Energy Inc.
  3. ConocoPhillips
  4. Continental Resources
  5. Earthstone Energy
  6. Emerald Oil
  7. Enerplus
  8. EOG Resources
  9. ExxonMobil
  10. Forestar Group
  11. Halcon Resources
  12. Hess
  13. Kodiak Oil & Gas Corp
I listed these companies to give you a sense of scale of how large the oil-drilling operation is in North Dakota. Above is a short snapshot of the investments in the state, believe me, there are many more. Each of these companies have large rigs setup with the goal of drilling as much oil as humanly possible — this operation is big.
So big, that The North Dakota Government released a statement predicting there to be an estimated 24 billion barrels of oil that could potentially be extracted from the Bakken Formation. This is a lot of oil, but how long would this take to become depleted? Well, a 2010 estimate claims oil production rates had reached 458,000 barrels per day. At this rate, it would take 52,401 days to extract all of the oil located in the Bakken Formation (or, 143 years).
Clearly, this wasn’t fast enough. Oil companies fully realize that the price of oil will be much lower 143 years from now because renewable energy will be the way of the future. Thus, they want to pump as much oil as possible, as soon as possible.

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More than one million barrels a day, that cuts down the time to deplete the Bakken formation from 143 years to approximately 65 years. Yep, still too long, given that renewable energy’s are bound to take over the market by the midpoint or turn of the century.

So let’s look at it from an oil company’s perspective. Do they really want to spend the next 65 years drilling oil from this goldmine? Of course not. So, being the savvy businessmen that they are, they conjure up this cool thing called the Dakota Access Pipeline!
The Dakota Access Pipeline: What Is It?
The economy in North Dakota is booming. Unemployment is lower there than anywhere else in America, and they still enjoy budget surpluses that help fund public facilities — all thanks to the discovery of a massive oil formation.
Ideally, one would think that the North Dakotan government would want to prolong the lifespan of this oil field, however, when the Dakota Access pipeline was announced, North Dakota Gov. Jack Dalrymple had just urged industry and government officials to build more pipelines to keep pace with the state’s oil production, which is second only to oil production in Texas.
By deciding to allow the construction of more pipelines, the governor of North Dakota, Jack Dalrymple, is not acting in favor of the citizens of North Dakota. The oil will be drilled in way less than 65 years, and the low unemployment rate due to the oil boom? Gone, because the government didn’t act to prolong any careers in the industry.
So, with demand for North Dakota oil skyrocketing, and with a government keen on exporting as much oil as possible, as fast as possible, we are left with the foundation for a massive pipeline, that will add 1200 more miles to an already gargantuan pipeline that stretches 71,000 miles.
If completed, the pipeline will connect the Bakken formation to Patoka, Illinois. It serves as a faster, more efficient means of transportation of oil, which effectively eliminates the need for rail and truck transportation of the oil (which can and will cause devastating accidents.) The pipeline aims to transport approximately 470,000 barrels per day with a capacity as high as 570,000 barrels per day, which adds at least 50% more exporting ability onto current Bakken crude oil production.
The pipeline is scheduled to be finished by the end of 2016.
Here’s where things get interesting…
I’m assuming everyone reading this is aware of the Dakota Access Pipeline issue already. But I’m going to take a step back and speak briefly, as if you were unaware of the events that are currently taking place.
Assuming this, and assuming all of the information I have just presented, I can’t blame you for asking what the big deal is about this pipeline. From the surface (aside from the social implications this pipeline brings) this project simply seems like another oil pipeline. There are thousands of them across the globe, so why is this one so important?
It has to do with the fact that this pipeline will be crossing sacred native land. Even more concerning, is the fact that the pipeline will also “cross 209 rivers, creeks and tributaries” along the way. Most pressing to the tribe however is the fact that it could potentially destroy ancient burial grounds and other sacred sites as well as threaten the Missouri River which currently acts as the tribe’s main source for irrigation and drinking water.
An in-depth 2010 report from Worcester Polytechnic Institute, which looked at the effects of three major oil spills, found increased incidences of cancer and digestive problems in people who had ingested the oil directly (in drinking water) or indirectly (through eating the meat of livestock exposed to the oil).

In addition, people who had used contaminated water for bathing or laundry appeared to experience a higher incidence of skin problems, ranging from mild rashes to severe and lasting eczema and malignant skin cancers.
It seems almost arbitrary to say, but consuming water that has been contaminated with oil is extremely dangerous to the health of the inhabitants consuming that water.
This raises the argument for the pipeline that the pipeline itself is safe, and is assured not to leak any oil. However, history, and statistics proves otherwise.
According to a study done by rowan cockett, an oil pipeline on average, sees a return on investment after a pipeline leakage within a 4-5 year period, making it a popular investment for oil companies when the next alternative is a 61 year return on investment period for a marine terminal spill, and upwards to a 250 year period on a full-blown oil pipeline rupture. The chance of an oil pipeline leakage? 25% according to this study.
25% is a large claim, but history backs it up.
Above is a visualization of every oil pipeline leakage within America over the course of a five year period. Since 2010, over 3,300 incidents of crude oil and liquified natural gas leaks or ruptures have occurred on U.S. pipelines. These incidents have killed 80 people, injured 389 more, and cost $2.8 billion in damages. They also released toxic, polluting chemicals in local soil, waterways, and air.
These results are staggering, but it is the harsh reality that comes with drilling this much oil. After seeing these diagrams, it essentially disproves my proposed ‘potential’ argument that oil pipelines are a safe, efficient means of transporting crude oil.
If the Dakota Access Pipeline is fully functional, statistics say there is a 25% chance every year that a leakage occurs somewhere along the pipeline. Although the U.S. Army Corps of Engineers conducted a limited review of the route, involving an environmental assessment of river crossings and portions of the project related to specific permits, and issued a finding of no significant impact, this does not mean that there will not be any significant environmental impact. I mean, just look at the graph above.
Thus, whether this leakage spills into a native water-way can’t be predicted, but it is a gamble that natives living in North and South Dakota do not want to take.
If the Dakota Access Pipeline becomes fully operational, it jeopardizes the way of life for thousands of native Americans living in regions that surround the pipeline
America was built off of large scale colonization and imperialism. It was founded by wealthy Spanish and British explorers, to which they murdered literally millions of native Americans in order to capture a land that did not belong to them.
Needless to say, the land that is being drilled into by oil companies is stolen land. It is land that has been captured by the native Americans through intimidation and brute force.
Protests by native Americans began in April of 2016 in an attempt to dispute the construction of this controversial pipeline.
Activists that include several native American tribes, most notably the Standing Rock Sioux, in March and April 2016, asked the Army Corps of Engineers to conduct a formal Environmental Impact Assessment and issue this statement before commencing the construction of the pipeline.
In July, however, the Army Corps of Engineers approved the water crossing permits for the Dakota Access Pipeline under a “fast track” option, and construction of the disputed section of pipeline continued, saying “the Corps effectively wrote off the tribe’s concerns and ignored the pipeline’s impacts to sacred sites and culturally important landscapes,” the Standing Rock Sioux Tribe filed suit against the Corps of Engineers, accusing the agency of violating the National Historic Preservation Act and other laws, to which they lost.
Whether or not the Army Corps of Engineers actually ignored the pipeline’s impacts to sacred sites is unknown, but that doesn’t deny the fact that Native American’s are being treated as second-class citizens in this whole ordeal. Their land, their health, and their overall way of life is being jeopardized with this potential pipeline, and nobody with substantial influence in the outcome of this ordeal seems to particularly care about them — probably because the natives don’t have millions of dollars to offer anyone like the oil companies do.
In April, a Standing Rock Sioux elder established a camp as a center for cultural preservation and spiritual resistance to the pipeline. Over the summer the camp grew to thousands of people.
Since then, numbers have grown by the thousands, including notable celebrities and other icons; yet, construction still continues.
What’s even more saddening about this is that these protests are not gaining much mainstream media coverage at all, until recently — and things are only getting worse.
In September, construction workers bulldozed a section of land that tribal historic preservation officers had just documented as a historic, sacred site, and when protesters entered the area security workers used attack dogs, which bit at least five of the protesters.
Since then, protests have gotten more violent, and the backlash from authorities more harsh. During the course of the protests over 120 people have been arrested, there have been incidents with guns and injuries, as well as repeated use of tear gas by authorities to help contain protesters.
Above is a scene where authorities ‘clashed’ with protesters on October 27th. A report states: A standoff between Dakota Access Pipeline protesters and law enforcement degenerated into violence Thursday when two protesters opened fire in separate incidents, wounding a “private individual” and narrowly missing a sheriff’s deputy, according to North Dakota officials.
The protests have been going on for months to no effective result thus far. Despite their efforts, plans to finish the pipeline have been delayed, but estimates see the completion as early as December 2016.
If completed, Native Americans living in North Dakota are put at the risk of consuming contaminated water, which as stated above, has severe health complications.
It’s saddening that not only the government of North Dakota has turned its back to its citizens, but also the federal government. The natives living in this area are literally being treated as second class citizens because oil is the top priority, and it’s terrible to sit back and watch it happen.
The Final Analysis
In my eyes, there are four main players in this situation…
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Just as American history goes, the Natives are the losers in this deal. It is absolutely amazing to see so many people taking the side of the Natives to help them throughout this terrible ordeal, but the fact of the matter is this; unless you have money, you are not protected by your government, at least in America.
I know that is a bold statement, but the American government is literally turning a blind eye to multinational oil companies and letting them infringe land agreements with the natives that date back to 1864.
It’s a sad realization that this pipeline will actually be constructed. It means Native Americans living in the area must now live with the risk of waking up one day with water that is not drinkable. Furthermore, in the case of such an event, we can already conclude from the events that took place in Flint, Michigan, that the Natives will receive minimal help from their largely corrupt government.
It’s sad to think of all the people that will suffer from this, but what’s worse, is that this event will end up being ‘just another issue among many’ in the grand scheme of things.
The controversy of the Dakota Access Pipeline will someday be forgotten once a more profitable news outlet story emerges, and then, we may only hear about it when a so called pipeline running through the Missouri river bursts, leaking thousands of gallons of oil into fresh water supplies that thousands of Native Americans just so happen to survive on.
The North Dakota Pipeline issue is one that involves social, economic, political, and environmental consequences. But I believe this controversy serves an even more profound, metaphorical interpretation.
An interpretation that sees a contradiction of interests between the Native Americans (what America once was) and the greedy elite of a largely capitalist society (what America now is).

 

However, one can’t be entirely surprised with all of this, considering that America was founded on the basis of every single thing that is happening in North Dakota, right now.

A Geopolitical Analysis of Western Intervention in Syria

David McDonald

David McDonald

David is a 19-year-old Canadian student currently attending the University of Guelph. He currently studies Public Management and economics with hopes of one day becoming an accomplished journalist. David enjoys reporting on global events and actively try to make a difference in the world.
David McDonald
A man at a site recently hit by what activists said was a Scud missile in Aleppo’s Ard al-Hamra neighborhood, February 23, 2013. REUTERS/Muzaffar Salman

Introduction

It seems like yesterday when the Syrian crisis and ISIS threats were all over the news. When in reality, this was several months ago.
It’s been a long time since I’ve seen news about the civil war going on in Syria. I just recently wrote an article about the United Kingdom leaving the European Union, and a main contributor to the public opting out of the multi-nation pact was the influx of Syrian refugees pouring into the country.
I’ve decided to tackle the daunting task of trying to understand what is going on in the Middle East right now, and condense it into a readable article with all the top facts that I think you should know.
More specifically, I’m going to analyse why there is civil unrest in Syria, why there are over 250,000 civilians dead and millions of others displaced and forced to be refugees, as well as why Western superpower USA along with Russia and the UK are invading the country and bombing thousands of innocent civilians (bet you haven’t heard about that on CNN). Furthermore, I’ll detail why this is a geopolitical crisis (politics having to do with geographical factors) and not just a civil war based on radical islamists who want nothing more than land and money.
The issue is very complex, and I won’t be able to offer every perspective in this article, but I will be able to give you a clear, concise guide to what is actually going on in the Middle East, and why there are millions of refugees that are fleeing to bordering countries.

History of Syrian Unrest

The country has been experiencing civil unrest for quite some time now. Since July 17th 2000, Bashar Al Assad, son of brutal dictator Havez Al Assad (ruled Syria from 1971 to 2000) has thrown the nation into a state of turmoil. He is unwilling to relinquish control to democratic pressures. He caused a civil war which shattered his nation. He opened the door to Al-Qaeda radicals to walk through and grow exponentially. He willingly allowed the use of weapons of mass destruction on his own people. The biggest problem of this whole mess? He isn’t even the worst dictator in his country.
Syria is in such a terrible state because there are two main evils fighting against each other: Assad and the rebellion (ISIS and the Kuds). So how did this all start?

Timeline of recent events in Syria (2011-present day)

  • March 2011- Security forces shoot dead protesters in southern city of Deraa demanding release of political prisoners, triggering violent unrest that steadily spread nationwide over the following months.

 

This event started the fight between the Syrian government and the IS (Islamic State)
  • May 2011 – Army tanks enter Deraa, Banyas, Homs and suburbs of Damascus in an effort to crush anti-regime protests. US and European Union tighten
  • June 2011 – 120 members of the security forces have been killed by “armed gangs” in the northwestern town of Jisr al-Shughour. Troops besiege the town and more than 10,000 people flee to Turkey. President Assad pledges to start a “national dialogue” on reform.
  • July 2011 – February 2012 – New Syrian National Council says it has forged a common front of internal and exiled opposition activists. Arab League votes to suspend Syria, accusing it of failing to implement an Arab peace plan, and imposes sanctions. December – Twin suicide bombs outside security buildings in Damascus kill 44, the first in a series of large blasts in the the capital that continue into the following summer.
  • July 2012 – Free Syria Army blows up three security chiefs in Damascus and seizes Aleppo in the north.
  • August 2012 – US President Obama warns that use of chemical weapons would tilt the US towards intervention.
  • 2013 – several bombings take place, bordering nations such as Israel were to blame at the time but action was never taken. Also sees the rise of Islamists. Syrian government accused of using chemical weapons to kill civilians in an attempt to distinguish an uprising, these claims were denied.
  • 2014 January-February – UN-brokered peace talks in Geneva fail, largely because Syrian authorities refuse to discuss a transitional government.
  • 2014 February – August – ISIS declare “caliphate” in several territories. This term means ‘Islamic State’ where a caliph is the political and religious leader and his power and authority is absolute, meaning the Syrian government has no power in the areas controlled by ISIS.
  • 2014 September – US and five Arab countries launch airstrikes against ISIS in the areas captured by the terrorist regime.
  • 2015 January – June – ISIS and Kurdish forces fight for territory and power.
  • 2015 September – Russia carries out its first airstrikes in Syria, saying they target the ISIS group, but others claim these strikes target anti-Assad rebels.
  • 2015 December – Britain joins US-led bombing raids against Islamic State in wake of Paris suicide bombing attacks.
  • 2016 March – Syrian government forces retake Palmyra from Islamic State, with Russian air assistance.
  • 2016 May – Present – US-Russian ceasefire set back in February is extended. Fighting still continues however.
Assad Vs. ISISTo sum all of this up, everything began when security forces killed peaceful protestors in a southern Syrian city. From there, Assad ordered army tanks to stop anti-regime protesters. The Syrian government then fails to implement a peace plan in the nation and the UN suspends them. From there, numerous terrorist acts take place from suicide bombings to mass killings in an attempt to overthrow the government. The government retaliated in an attempt to restore peace, but the fighting only got out of hand. ISIS began conquering massive amounts of land throughout the country and claimed these areas to be an Islamic State (an area where the government has no control). From there, the US, Russia, UK, China, and Germany alongside several other nations have all intervened to no peaceful conclusion yet. To this day, the fighting still continues, the government still has little control over its country, and thousands of people are fleeing the country on a daily basis. Although you don’t hear about this much in the news anymore, the problems still consist.
 

 

Why are America and Russia Interfering?

The US media is making the argument that because the Assad regime is using chemical weapons on the Syrian people, the US military should intervene by arming and training the Free Syrian Army in the hopes of overthrowing President Assad and restoring peace to the Syrian people.
On the surface, most Americans would agree that Assad is a brutal dictator and should be removed from office. But if you asked most Americans whether or not the US military should intervene in Syria to make sure the profit margins of oil companies remain strong, it’s likely most rational folks would say no.
Digging just beneath the surface, it’s easy to see that US interest in Syria isn’t to provide Democracy to the nation, but to ensure the Kirkuk-Banias oil pipeline (Syria’s largest pipeline that is bringing in billions of dollars worth of revenue) will be restored to profitable status.
Even President Obama’s press secretary said that foreign policy isn’t driven by what the people want, but by what is best for “American interests.”
Air strikes in Iraq and Syria
Above you can see where US and Russian air strikes are being placed. Given the knowledge that the US media has backed us with, one would think that this is primarily to defeat ISIS, right?
Well, in reality, it’s much more than that.
Oil pipelines in Syria
I’ve taken the above map and added the main Syrian pipelines with large black lines, as well as small red circles that show large oil refineries in the country.
It might just be me (I’m just being humble, it isn’t just me) but doesn’t it seem a little weird that the largest, most concentrated US and Russian airstrikes are placed right by large oil refineries and pipelines?
It isn’t just a coincidence, this is precisely why the US and Russia are in Syria. Notice how Russia’s airstrikes occupy the Western side of the country while the US airstrikes occupy the northern, eastern, and southern areas of Syria, as well as areas in Iraq.
There are huge areas occupied by ISIS that the US and Russia are paying no attention to, why? Because they aren’t close to the oil pipelines!
One of the main black lines on this map is the Kirkuk-Banias pipeline, which runs from Kirkuk in Northern Iraq, to the Syrian town of Banias, on the Mediterranean Sea between Turkey and Lebanon.
Ever since US forces inadvertently destroyed it in 2003, most of the pipeline has been shut down. While there have been plans in the works to make the Iraqi portion of the pipeline functional again, those plans have yet to come to fruition, and Syria has at least 2.5 billion barrels of oil in its fields, making it the next largest Middle Eastern oil producer after Iraq.
Oil companies are becoming dependent on the Kirkuk-Banias pipeline’s output and are eager to get the pipeline operational again. The tension over the Syrian oil situation is certainly being felt by wealthy investors in the markets, who are thus dictating US foreign policy.
Interesting how big time oil investors are having a large say in US foreign affairs, right? It just goes to show how much of US foreign intervention is really done in the sake of improving the lives of others, rather than economical interests (that’s right, not a sizeable percentage of it).
middle east oil pipelines
Moving on, Qatar needed to get its Qatar-Turkey” pipeline through Syria, and Europe looked forward to linking up with the world’s largest gas producer because it was over-dependent on Russian supplies.
Vladimir Putin had previously cut off gas supplies to Europe in the dead of winter 2009 after a dispute with Ukraine over gas royalties. The Russian military has since invaded Ukraine and given Putin’s aggressive stance, Europe now urgently needs to find an alternate gas supply not controlled by Russia. This makes a middle-eastern pipeline coming through Syria a very attractive proposition.

The Assads soon realized that they were in a position of power. They decided to up the ante by creating an alternative source of fuel for a trans-Syrian pipeline. Thus, the Iran-Iraq-Syria pipeline was born.
If you look at this diagram and compare it to the previous one that shows where Russia and US bombs are placed, it is clear that Russia is trying to maintain control of already established pipelines in Syria, and the junction where these two new pipelines cross.
From an economic standpoint, this is a smart decision. Considering that Russia is the main contributor of oil to Europe, any competition can severely hurt their economy. However, from an ethical standpoint, it is completely unfair to the Syrian people.
Yes, Russia and the US are providing support to the anti-government army, but at what cost? You guessed it, the homes of countless Syrian people.
This brings me onto the next issue in Syria: the refugee crisis.

Syrian Refugee Crisis

Syria’s civil war is easily the worst humanitarian crisis we’ve seen in a very long time. Half of the country’s pre-war population (more than 11 million people) has been forced to flee their homes.
syrian refugees150,000+ of whom have been killed.
Families are struggling to survive inside Syria, or make a new home in neighboring countries. Others are risking their lives on the way to Europe, where several countries are tightening down on immigration regulations.
Bombings are destroying crowded cities and horrific human rights violations are widespread. Basic necessities like food and medical care are sparse.

The U.N. estimates that 6.6 million people are internally displaced. When you also consider refugees, well over half of the country’s pre-war population of 23 million is in need of urgent humanitarian assistance, whether they still remain in the country or have escaped across the borders.

Where are they fleeing to?


Syrian Refugee Crisis
As you can see, many have chosen bordering countries as a temporary safety net, but the conditions are simply too poor for these people to stay there long term.
Thousands have migrated into Europe, where countries are struggling to find the resources to help them.


Syrian Refugee Crisis
These refugees face terrible living conditions because they do not have secure homes. They live in tents, crowded with many other people, and eat only what is given to them.
This is unfair to the millions of people who have lost their way of life, and it’s all because of political and religious disagreements from people of power within Syria and Iraq, along with economic interests from Western nations.
It’s a sad realization that this is happening right now, yet we rarely hear it on TV, or even the internet for that matter. This is one of the biggest displacements of humans we’ve seen in recent years and it’s unfortunate that the Syrian conflict has dragged on for this long, because these people have nowhere to go.
It’s hard for developed nations to simply let in thousands of refugees because it threatens security, the economy, and job security. It’s easy to argue that we should bring as many of them to our country as possible, but from a legitimate standpoint, it is much harder to do.

My take on all of this

It’s a lot of information to take in, and even experts on this issue get confused as to what the interests are of everyone involved. But after this analysis, I can take away a few things:
  1. This issue won’t be solved unless the powers in Syria and Iraq can come to a conclusion as to how they will be governed. This is easier said than done, because they have been fighting over religion for thousands of years. Thus, US-Russia intervention is only a short term solution. Extremist groups won’t be going anywhere if they are dissatisfied with the leadership in the country.
  2. The United States’ main interest in Syria is the Kirkuk-Banias pipeline. It is worth billions of dollars and is currently not functioning. If they can effectively overthrow ISIS and take control of this pipeline, it will be a very lucrative proposition for US oil companies.
  3. Russia is in Syria to control the Western pipeline junctions, primarily the Iran-Iraq-Syria pipeline, which could pose a large economic risk for Russia if it becomes a main exporter of oil into Europe.
  4. Alongside all of these geopolitical issues, it seems that the media is underrepresenting Syrian refugees, as they rarely make it into the news. Millions of innocent civilians have been displaced, and a solution to this problem doesn’t seem to be on the horizon. If the US and Russia were really there to make a positive impact, they would be helping these refugees instead of bombing their homes.
 
 
This analysis has taught me more about how war really works. To people who know a lot about war, it won’t come to a surprise that it is all about money. I’m completely aware of this, but before this analysis, I wasn’t aware of the massive pipeline issues happening right now because the media doesn’t tell you about it.
Syria Vs. Western PowersI’ve also realized that the mainstream media not only in North America, but globally, doesn’t tell you the whole story. There is so much more to this conflict than America fighting ISIS and ISIS fighting back against a corrupt government. There are layers upon layers to this that have religious, political, and economic consequences. There are many nations involved, and billions of dollars on the line in the form of oil money. And the civilians receive the bad end of this deal.
If you dig deeper, you can find the true motives of everyone involved.
I’ve found some of the motives, but lord knows, there is much more to this issue than is even presented on the internet.
But from my humble perspective, it’s just sad that the two most powerful nations in the world aren’t fighting to protect the innocent civilians of Syria and bring peace back to the country, but rather fighting to control oil pipelines and profit billions of dollars in order to “protect American interests”.
It’s like me witnessing a bully take a little kids money and me going up to him and reclaiming the kids money but instead of giving the kid his money back, I step over him and go buy myself some ice cream.
It just goes to show how blinded we are by money and power, especially amongst the people that claim the top position on the human hierarchy.
 
Something needs to change, and it isn’t going to come with the people who are in charge, it must come with a massive shift in ideological thinking. A shift in thinking that sees us value the betterment of our fellow people rather than the claiming of material desires, like me giving that little kid his money back.
 
 
 


http://theantimedia.org/how-the-war-in-syria-is-about-oil-not-isis/