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Exxon And The Environment Essay

ExxonMobil Domestic Environment

The oil industry in the U.S. serves as the foundation for virtually the whole economy. The U.S. has largely exhausted its own domestic oil supply so it must rely primarily on foreign sources. New technologies have allowed the extraction of the oil that still remains in the U.S. Offshore drilling and oil reserves that are only accessible by hydraulic fracking represent the two best examples of controversial extraction methods. The oil spill in the Gulf of Mexico represents very clearly the risks associated with off-shore extraction. Furthermore, hydraulic fracking and the use of shale reserves have also been meet with a lot of resistance for their environmental risks.

Global Environment

The global environment for oil and gas has changed significantly in just the last few years. The conditions have been created by an increase supply in oil. These supply increases have largely come from technological developments that have allowed for new forms of oil to extract such as shale oil which has in turn reduced the dependence on the cartels and Middle Eastern oil (Doshi & Corrigan, 2015). There have also been changes in the demand due to technology development as well. Engines and efficiencies have reduced the total demand for oil per user...

The fall in oil prices has led companies to experience falling margins and losses. Exxon has not been immune from this trend, even with its massive size. Companies will have to make some tough economic decision in the short-term.
"Exxon Mobil and Chevron on Friday posted their worst quarterly results of the current decade as oil and natural gas prices continued to plunge.

The results of the companies, and those of almost the entire oil patch this week, were disappointing but not all that surprising since the price of oil is now half what it was a year ago." (Krauss, 2015)

Figure 1 - Prices/Production (The Economist, 2015)

Political-Legal Environment

There are two primary political risks to Exxon and other companies in the oil industry. One obvious risk is due to different regulations that could be enacted that deal with environmental or other issues. However, much of the oil and gas industry is heavily subsidized and there is also some risk that these subsidies could begin shrinking…

Sources used in this document:
References

Doshi, V., & Corrigan, J. (2015). 2015 Oil and Gas Trends. Retrieved from Strategy &: http://www.strategyand.pwc.com/perspectives/2015-oil-gas-trends

Krauss, C. (2015, July 31). Exxon and Chevron Report Worst Quarterly Results of Current Decade. Retrieved from The New York Times: http://www.nytimes.com/2015/08/01/business/energy-environment/exxon-mobil-chevron-q2-earnings-oil-prices.html

The Economist. (2015, September 25). The perils of relying on the sticky stuff. Retrieved from The Economist: http://www.economist.com/news/middle-east-and-africa/21663235-persistent-low-prices-threaten-entire-region-perils-relying?zid=298&ah=0bc99f9da8f185b2964b6cef412227be
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