Oil price’s effect on environment

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With oil prices dancing around the $100 a barrel mark, economies around the world are feeling the pressure. However, those worried about the economy are not the only ones feeling pressure from a high oil price. People concerned about the environment are also tense about high oil prices. The impact a high oil price has on the environment is more complex than its effect on the economy. For the environment it is both a good and bad thing.

A high oil price reminds everyone that we should be focusing all of our efforts to find a sustainable replacement for oil in the form of alternative energy. We should also try to drive less so that we don’t have to use as much of the black gold. This is all very good news for environmentalists. At the same time, there is also a negative aspect that comes from that same line of thought. The oil sands in Alberta, Canada are an important source of oil. It is also a source that is in its infancy and has a lot of development that needs to be done to reach its potential. Unfortunately, this form of oil is more harmful to the environment than conventional oil and much more harmful than alternative energy projects.

At $100 a barrel, developing the oil sands seems like a great business decision. The U.S. and the rest of the world need oil and would be thrilled to buy it from Canada versus countries in the Middle East. However, this harms the environment even more and also takes some of the momentum and investment dollars away from alternative energy projects.

High oil prices are a double edge sword for environmentalists. If alternative energy sources and the infrastructure that goes with it can be developed quickly and inexpensively then this will reduce the desire for the oil sands. Although the money that would flow to Canada from the oil sands would be great, they can also make money from investments in alternative energy. Much of how this plays out depends on how governments decide to allocate funds and how they shape laws. Either way, high oil prices are pushing the world to change in one way or another.