Granted, energy is one of the key ingredients needed to fuel the economic development of a nation. Lack of enough energy would lead to the reduced economic growth. This is because the production of goods and services requires energy. Gas is one of the principal fuels used in most countries. It is one of the major expenditures of not only people but also entire nations (if they do not produce it). Therefore, issues concerning gas always come to the limelight due to the high dependency on the product by many people. Due to the importance of the commodity, most governments have enacted regulations governing its usage. It prevents unscrupulous traders from benefiting due to unfair practices. The price of gas and the effect it has on the environment are some of the contemporary issues facing the usage of oil as a source of energy.
Organization of Petroleum Exporting Countries (OPEC) controls the international prices of crude oil. OPEC regulates the prices of crude oil, and consequently, the price of gas, through restricting the supply of the commodity by the producing countries. Reduced supply of oil leads to increase in the price of the commodity due to the market forces. Conversely, increase in the supply of oil leads to a decrease in its price in the international market. The regulations of some countries may also restrict the supply of the commodity, which leads to shortages (Mankiw 114).
The beginning of this decade has seen increased volatility in the price of crude oil. In addition, political revolutions in the Middle East, popularly known as the Arab Spring, led to disruptions in the supply of the commodity. The Arab spring, which began in 2011, led to the collapse of governments in Tunisia, Egypt, Libya, and Yemen. It also led to increased prices of oil in the world market due to interruptions in the supply of the commodity. Speculators and energy companies have made vast sums of money due to the volatility in the price of the commodity. During the period, ExxonMobil, the largest company in the US, reported quarterly profits of $10 billion, a US record. This has elicited views from some quarters that the companies are making profits illegally through overcharging of the consumers (Schaller 22). The monopolistic character of the energy companies enables them to fix the prices of oil (McConnell, Brue, and Flynn 220). Iran is one of the OPEC countries that produce a large amount of oil. Its nuclear program has made the EU and the US to impose economic sanctions on the country. Speculation is rife so the sanctions would lead to an increase in the price of crude in the international market for the commodity.
Oil is a non-renewable resource - its reserves are decreasing at unprecedented rates. This has led to the growing awareness on the usage of alternative sources of energy. Most governments have increased funding on research into alternative sources of energy. In addition, oil leads to environmental pollution. Environmental conservation is a global issue that affects the formulation of policies. The BP oil spill in the Gulf of Mexico is a classic example of the devastating effects which oil has on the environment. The oil spill was a result of millions barrels of oil pouring into the sea, which led to the widely spreading damage of marine and aquatic habitats. This made the US suspend offshore drilling of oil due to the devastating effects of the oil spill on the environment (Haris 16).
Nevertheless, oil is still the main source of fuel to, virtually, all countries in the world. Therefore, unless the world embraces the usage of alternative sources of energy, issues regarding oil will continue affecting various countries. Environmental degradation because of gas use will continue. Additionally, volatility of the commodity will ensure that energy companies continue making astronomical profits due to speculation. The relevant authorities should, therefore, put greater emphasis on the usage of renewable sources of energy.