1. OIL POLITICS Lesson 6.2 - Students will analyze the impact of OPEC and oil consumption and what it means for the future.

2. OPEC Organization of the Petroleum Exporting Countries Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, Venezuela Created in 1960, very influential in the 1970’s Headquarters in Vienna, Austria Goal is to coordinate petroleum policies and prices; safeguard members’ interests by providing steady income to member countries

3. 1973 OIL EMBARGO 1973 OPEC, plus Egypt and Syria, announced there would be no oil to any nation that supported Israel in the Yom Kippur War. (US, allies in Western Europe) OPEC quadrupled the price of world oil Many nations began to make an effort to lessen dependence on OPEC

4. 1973 OIL EMBARGO Results in the U.S. National speed limit of 55mph until 1995 Department of Energy created in 1977 US Strategic Petroleum Reserve established – 1978 Downsized cars, smaller engines Alternative renewable energy sources sought

5. W HAT IT WAS LIKE IN 1973

6. Americans consume petroleum products at a rate of three-and-a-half gallons of oil and more than 250 cubic feet of natural gas per day each! But, as shown here petroleum is not just used for fuel. Return SolventsDieselMotor OilBearing Grease InkFloor WaxBallpoint PensFootball Cleats UpholsterySweatersBoatsInsecticides Bicycle TiresSports Car BodiesNail PolishFishing lures DressesTiresGolf BagsPerfumes CassettesDishwasherTool BoxesShoe Polish Motorcycle HelmetCaulkingPetroleum JellyTransparent Tape CD PlayerFaucet WashersAntisepticsClothesline CurtainsFood PreservativesBasketballsSoap Vitamin CapsulesAntihistaminesPursesShoes DashboardsCortisoneDeodorantFootballs PuttyDyesPanty HoseRefrigerant PercolatorsLife JacketsRubbing AlcoholLinings SkisTV CabinetsShag RugsElectrician's Tape Tool RacksCar Battery CasesEpoxyPaint One 42-gallon barrel of oil creates 19.4 gallons of gasoline. The rest (over half) is used to make things like: Americans consume petroleum products at a rate of three and a half gallons of oil per day each. But as you can see from this chart petroleum is not just used for fuel!!

7. DAILY OIL CONSUMPTION OPEC’S WORLD ENERGY MODEL (OWEM)

8. HIGH AND LOW OIL PRICES High Oil Prices Shortage of oil supplies Sentiment: if traders think there will be a shortage Taxes greatly effect price of oil products Low Oil Prices Imbalance: too much supply/too little demand Non-OPEC producers supply as much as they can

9. PRO/CON FOR OPEC MEMBER STATES PRO Control and regulate oil supply Stable prices=predictable economy Lower competition = more stability and cooperation Huge global power Con “rogue” states can disrupt planning Unbalanced in Saudi Arabia's favor Quotas limit production and options for responding to crisis Global markets can disrupt central planning

12. OIL POLITICS ASSIGNMENT For this assignment you will need: Two colored pencils Calculator Oil Reserves Packet