The Last Step: Handing Over the Financial Model
Financial models are complex projects which take months or even years to build. It also needs to be understood that the people developing the financial models are not the same people who maintain it over the long term. Hence, there is a need for a formal transition wherein the creator of the model must handover […]
Seed Funding – Introduction
Creating a successful startup business can be a daunting task. This is because a startup business needs a viable idea as well as significant funding in order to be able to grow into a successful business. Now, viable business ideas often come to people who are deeply engaged with the work in their day-to-day life. […]
Accounting for Players Who Have been Promoted Internally
It is common for sporting franchises to create an internal system so that young players with high potential can be identified and groomed at an early stage. Such players form the backbone of any successful football franchise since they are cost-effective. It is common for such players to help create a disproportionately high value in […]
The Functions of a Financial System
Financial resources are scattered across the economy. This is the reason that there is a need for a financial system that can enable the timely deployment of these resources across different parts of the economy at the right time. A well-functioning financial system is supposed to perform several functions. Some of these functions have been […]
Disadvantages of Omnichannel Retailing
In the previous article, we have explained the concept of omnichannel retailing. We have also seen how it is different from multichannel retailing and what are some of the benefits of using omnichannel retailing. However, there are many critics who believe that omnichannel retailing is only good in theory. When it comes to real life, […]
The American energy sector has really taken off in the past few years.
The discovery of “fracking” or hydraulic fracturing has completely changed the dynamics of the oil and gas industry. The end result has been a historic boom in the oil and gas industry.
For the first time in many decades, America has become self-sufficient in the production of oil. Also, countries like Saudi Arabia are no longer able to dominate America since America is no longer dependent on these nations for its oil import.
At the present moment, America produces more than 10 million barrels of oil per day. It is expected to overtake the production of Russia and become the largest producer of oil in the world.
Up until now, the Trump presidency was a godsend for the oil and gas industry. This industry has always been highly regulated because of the huge environmental impact that it has. However, of late, Donald Trump made the United States exit the Paris Accord. As a result, a lot of regulations that earlier applied to the oil and gas industry no longer apply. Fewer regulations mean less cost. It is this less cost that has made the United States more competitive in the international market.
The oil producing and exploring nations have been put in jeopardy ever since Donald Trump exited the Paris Accord. There are many critics who suggest that the steel and aluminum lobby was funded by the Gulf States to induce Trump to impose duties on foreign made steel and aluminum.
Clearly, the American steel and aluminum industry is the direct beneficiary of this action. However, the Gulf States are the real beneficiaries even though their benefits are not visible to the average person.
It is difficult to believe that Donald Trump would want to hurt the oil and gas industry knowingly. Oil and gas sector have always been on his mental map to “Make America Great Again”. Hence, he seems to have inadvertently placed a huge roadblock on the path of the oil industry.
Hence, the livelihood of millions of Americans who work in the oil and gas sector is at risk because of the tariffs on imported steel and aluminum. Donald Trump’s actions will end up creating few jobs in the steel industry.
However, they are likely to lead to massive layoffs in the oil and gas sector. These policies are just disturbing the balance of free trade. The basic principle of free trade is that countries should produce whatever they can produce most effectively. It seems like America is not very effective in the production of steel. However, the government is trying to force consumers to buy American steel. This is disturbing the cost structure of many industries.
Oil is used for transportation of all goods in general. Hence, a rise in the price of oil will lead to a rise in the price of all goods. Donald Trump’s actions may end up inadvertently causing price inflation in the economy. This is the reason why people from the oil and gas lobby are trying to convince Donald Trump to repeal his tariffs or change their nature. The very existence of American oil and gas industry can be threatened as a result of these tariffs.
America would need more time to prepare itself for a trade war. At the present moment, it is likely that American oil and gas industry may be derailed from its path. Had it been allowed to continue on its path, it would have certainly become the largest producer of oil in the world by 2021.
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