The question of increased drilling is controversial, with many people pointing to what they say are unavoidable negative consequences of increased oil production. It is indeed the case that careless or disreputable developers can fail to observer established safety procedures, but the industry as a whole has worked with federal and state authorities as well as local communities to ensure that drilling and related activities are carried out responsibly. An expanded oil industry creates benefits not only for investors working with the JBH Consulting Group, but also for society as a whole. Here are some of the benefits that can come with expanding US oil production.
Lower Prices and Economic Boost
Increased supplies of oil will help keep prices lower. Lower prices can be a double-edged sword, but in general if the costs of oil are lower and more importantly stable, then every industry that depends on oil is able to keep its prices lower as well. Lower costs therefore have an immediate for consumers. Relatively stable prices have another benefit – if businesses and producers can count on reliable prices over a longer period, they are better able to make investments that can contribute to overall economic growth. This includes investments in finding ways to extract oil resources more efficiently and effectively so that it is economically viable even when prices are low.
Oil reserves are frequently located in remote areas with relatively few economic opportunities for local development. The expansion of exploration and recovery efforts can bring economic activity to these areas. First, the industry can create many local jobs, both skilled and unskilled. When people have reliable income, they have more to spend – this stimulates the local economy and creates a growing tax base at the same time. This is especially important in remote Arctic communities. Industry jobs provide opportunities for upward mobility as a result of training and on the job experience. Additionally, support or spin-off jobs are created in the wider community as services expand to support increased people and activity.
With increased opportunities to drill come increased opportunities to improve the infrastructure and technologies. This means that the industry as a whole benefits from the opportunity to develop better and safer practices because it provide economic incentives for producers to invest in research and development that may otherwise be too costly. Already, off-shore drilling has become much safer than it was in 2010 as a result of efforts to improve prevention and response strategies.
Although people are quick to point to the environmental dangers posed by off-shore drilling in particular, it may actually be the case that off-shore drilling helps to prevent damage. Many oil spills are the result not of an accident but rather of natural seepage from the sea floor. Studies are suggesting that drilling in these areas helps to reduce the pressure causing the seepage, and may help to prevent oil spills. Another unexpected environmental benefit of offshore drilling is that the rigs actually act as artificial reefs and create marine habitats for creatures of all kinds.