Petrocurrency, is a neologism used with three distinct meanings, often confused:
"Petrocurrency" or (more commonly) "petrodollars" are popular shorthand for revenues from petroleum exports, mainly from the OPEC members plus Russia and Norway. Especially during periods of historically expensive oil, the associated financial flows can reach a scale of hundreds of billions of US dollar-equivalents per year – including a wide range of transactions in a variety of currencies, some pegged to the US dollar and some not.
The Dutch guilder was once regarded as a petrocurrency due to its large quantities of natural gas and North Sea oil exports. The Dutch Guilder strengthened greatly in the 1970s, after OPEC began a series of price hikes throughout the decade that consequently increased the value of all oil producing nations' currencies. However, as a result of the appreciation of the Guilder, industrial manufacturing and services in the Netherlands during the 1970s and into the 1980s were crowded out of the larger national economy, and the country became increasingly non-competitive on world markets due to the high cost of Dutch industrial and service exports . This phenomenon is often referred to in economics literature as Dutch disease.
The Canadian dollar is increasingly viewed as a petrocurrency in the 21st Century. Generally speaking, as the price of oil rises, oil-related export revenues rise for an oil exporting nation, and thus constitute a larger monetary component of exports. Thus it has been for Canada. As their oil sands deposits have been increasingly exploited and sold on the international market, movements of the Canadian dollar have become increasingly correlated with the price of oil. For example, the exchange rate of Canadian dollars for Japanese yen (99% of Japan's oil is imported) is 85% correlated with crude prices. As long as oil exports remain a strong component of Canada’s exports, oil prices will influence the value of the Canadian dollar. If the share of oil and gas exports increases further, the link between oil prices and the exchange rate may become even stronger.
As the world's dominant reserve currency the United States dollar has been a major currency for trading oil (sometimes the term 'Petrodollar' is mistakenly used to refer to this concept). In August 2018, Venezuela joined the group of countries that allow their oil to be purchased in currencies other than US Dollars, thus allowing purchases in Euros, Yuan and other directly convertible currencies. Other nations that permit this include Iran.
After WWII, international oil prices were for some time based on discounts or premiums relative to that for oil in the Gulf of Mexico.
After the Bretton Woods conference in the year 1944, the UK and its allies discontinued linking their currencies with gold; however, the US dollar continued to be pegged to gold, at $35 per ounce -- from 1941 to 1971.
President Nixon cancelled the fixed-rate convertibility of US dollars to gold in 1971. In the absence of fixed value convertibility to gold, compared to other currencies, the US dollar subsequently deteriorated in value for several years, making fixed USD to local currency exchange rates unsustainable for most countries.
Since the agreements of 1971 and 1973, OPEC oil is generally quoted in US dollars, sometimes referred to as petrodollars.
Since the beginning of 2003, Iran has required payment in euros for exports to Asia and Europe. The government opened an Iranian Oil Bourse on the free trade zone on the island of Kish, for the express purpose of trading oil priced in other currencies, including euros.
The tight oil (shale oil) boom in the USA starting in the early 2000s through 2010s (as well as increased production capacity in many other countries) greatly limited OPEC's ability to control oil prices. Consequently, due to a drastic fall in Nymex crude oil price to as low as $35.35 dollars per barrel in 2015, many oil-exporting countries have had severe problems in balancing their budget.
Thirty years from now there will be a huge amount of oil – and no buyers. Oil will be left in the ground. The Stone Age came to an end, not because we had a lack of stones, and the oil age will come to an end not because we have a lack of oil.
The petro, or petromoneda, launched in February 2018, is a cryptocurrency developed by the government of Venezuela. Announced in December 2017, it is claimed to be backed by the country's oil and mineral reserves, and it is intended to supplement Venezuela's plummeting bolívar fuerte currency, purportedly as a means of circumventing U.S. sanctions and accessing international financing.
The Canadian dollar (symbol: $; code: CAD; French: dollar canadien) is the currency of Canada. It is abbreviated with the dollar sign $, or sometimes Can$ or C$ to distinguish it from other dollar-denominated currencies. It is divided into 100 cents (¢).
Owing to the image of a loon on the one-dollar coin, the currency is sometimes referred to as the loonie by foreign exchange traders and analysts, as it is by Canadians in general, or huard in French.
Accounting for approximately 2% of all global reserves, the Canadian dollar is the fifth most held reserve currency in the world, behind the U.S. dollar, the euro, the yen and the pound sterling. The Canadian dollar is popular with central banks because of Canada's relative economic soundness, the Canadian government's strong sovereign position, and the stability of the country's legal and political systems.Central Bank of Ireland
The Central Bank of Ireland (Irish: Banc Ceannais na hÉireann) is the Republic of Ireland's central bank, and as such part of the European System of Central Banks (ESCB). It is the country's financial services regulator for most categories of financial firms. It was the issuer of Irish pound banknotes and coinage until the introduction of the euro currency, and now provides this service for the European Central Bank.
The Central Bank was founded on 1 February 1943 and since 1 January 1972 has been the banker of the Government of Ireland in accordance with the Central Bank Act 1971, which can be seen in legislative terms as completing the long transition from a currency board to a fully functional central bank.Its head office was located on Dame Street, Dublin from 1979 until 2017. Its offices at Iveagh Court and College Green also closed down at the same time. Since March 2017, its headquarters are located on North Wall Quay, where the public may exchange non-current Irish coinage and currency (both pre- and post-decimalization) for euros, as well as high value euro banknotes and "mutilated" currency. It also operates from premises at nearby Spencer Dock. The Currency Centre at Sandyford is the currency manufacture, warehouse and distribution site of the bank.The Central Bank's reputation was damaged in the Irish financial crisis. While the Bank has taken actions to address some of the main criticisms (e.g. break from "green jersey agenda", explicit mortgage controls, and the new modified gross national income metric), there is evidence other issues remain (e.g. commercial property bubbles, and light-touch regulation), and that new controls, such as mortgage limits, are being circumvented by Irish banks and the Irish State.Currency
A currency (from Middle English: curraunt, "in circulation", from Latin: currens, -entis), in the most specific sense is money in any form when in use or circulation as a medium of exchange, especially circulating banknotes and coins. A more general definition is that a currency is a system of money (monetary units) in common use, especially for people in a nation. Under this definition, US dollars (US$), pounds sterling (£), Australian dollars (A$), European euros (€), Russian rubles (₽) and Indian Rupees (₹) are examples of currencies. These various currencies are recognized as stores of value and are traded between nations in foreign exchange markets, which determine the relative values of the different currencies. Currencies in this sense are defined by governments, and each type has limited boundaries of acceptance.
Other definitions of the term "currency" are discussed in their respective synonymous articles banknote, coin, and money. The latter definition, pertaining to the currency systems of nations, is the topic of this article. Currencies can be classified into two monetary systems: fiat money and commodity money, depending on what guarantees the currency's value (the economy at large vs. the government's physical metal reserves). Some currencies are legal tender in certain political jurisdictions. Others are simply traded for their economic value. Digital currency has arisen with the popularity of computers and the Internet.Currency substitution
Currency substitution or dollarization is the use of a foreign currency in parallel to or instead of the domestic currency.Currency substitution can be full or partial. Most, if not all, full currency substitution has taken place after a major economic crisis, for example, Ecuador and El Salvador in Latin America and Zimbabwe in Africa. Some small economies, for whom it is impractical to maintain an independent currency, use those of their larger neighbours; for example Liechtenstein uses the Swiss Franc.
Partial currency substitution occurs when residents of a country choose to hold a significant share of their financial assets denominated in a foreign currency. It can also occur as a gradual conversion to full currency substitution, for example, Argentina and Peru were both in the process of converting to the U.S. dollar during the 1990s.East Texas Oil Field
The East Texas Oil Field is a large oil and gas field in east Texas. Covering 140,000 acres (57,000 ha) and parts of five counties, and having 30,340 historic and active oil wells, it is the second-largest oil field in the United States outside Alaska, and first in total volume of oil recovered since its discovery in 1930.
Over 5.42 billion barrels of oil have been produced from it to-date. It is a component of the Mid-Continent Oil Province, the huge region of petroleum deposits extending from Kansas to New Mexico to the Gulf of Mexico.
The field includes parts of Gregg, western Rusk, southern Upshur, southeastern Smith, and northeastern Cherokee counties in the northeastern part of the state. Overall the field is about 45 miles (72 km) long on the north-south axis, and five miles (8 km) across. Interstate 20 cuts across the field from east to west, and the towns of Kilgore, Overton, and Gladewater are on the field. At one time, downtown Kilgore had more than 1,000 active wells clustered in a tight area, making it the densest oil development in the world.Energy development
Energy development is the field of activities focused on obtaining sources of energy from natural resources. These activities include production of conventional, alternative and renewable sources of energy, and for the recovery and reuse of energy that would otherwise be wasted. Energy conservation and efficiency measures reduce the demand for energy development, and can have benefits to society with improvements to environmental issues.
Societies use energy for transportation, manufacturing, illumination, heating and air conditioning, and communication, for industrial, commercial, and domestic purposes. Energy resources may be classified as primary resources, where the resource can be used in substantially its original form, or as secondary resources, where the energy source must be converted into a more conveniently usable form. Non-renewable resources are significantly depleted by human use, whereas renewable resources are produced by ongoing processes that can sustain indefinite human exploitation.
Thousands of people are employed in the energy industry. The conventional industry comprises the petroleum industry, the natural gas industry, the electrical power industry, and the nuclear industry. New energy industries include the renewable energy industry, comprising alternative and sustainable manufacture, distribution, and sale of alternative fuels.History of the petroleum industry
The petroleum industry is not of recent origin, but petroleum's current status as the key component of politics, society, and technology has its roots in the early 20th century. The invention of the internal combustion engine was the major influence in the rise in the importance of petroleum.International use of the U.S. dollar
Besides being the main currency of the United States, the American dollar is used as the standard unit of currency in international markets for commodities such as gold and petroleum (the latter, sometimes called petrocurrency, is the source of the term petrodollar). Some non-U.S. companies dealing in globalized markets, such as Airbus, list their prices in dollars.
The U.S. dollar is the world's foremost reserve currency. In addition to holdings by central banks and other institutions, there are many private holdings, which are believed to be mostly in one-hundred-dollar banknotes (indeed, most American banknotes actually are held outside the United States). All holdings of U.S.-dollar bank deposits held by non-residents of the United States are known as "eurodollars" (not to be confused with the euro), regardless of the location of the bank holding the deposit (which may be inside or outside the U.S.).
Economist Paul Samuelson and others (including, at his death, Milton Friedman) have maintained that the overseas demand for dollars allows the United States to maintain persistent trade deficits without causing the value of the currency to depreciate or the flow of trade to readjust. But Samuelson stated in 2005 that at some uncertain future period these pressures would precipitate a run against the U.S. dollar with serious global financial consequences.Oil shale
Oil shale is an organic-rich fine-grained sedimentary rock containing kerogen (a solid mixture of organic chemical compounds) from which liquid hydrocarbons can be produced, called shale oil (not to be confused with tight oil—crude oil occurring naturally in shales). Shale oil is a substitute for conventional crude oil; however, extracting shale oil from oil shale is more costly than the production of conventional crude oil both financially and in terms of its environmental impact. Deposits of oil shale occur around the world, including major deposits in the United States. A 2016 estimate of global deposits set the total world resources of oil shale equivalent of 6.05 trillion barrels (962 billion cubic metres) of oil in place.Heating oil shale to a sufficiently high temperature causes the chemical process of pyrolysis to yield a vapor. Upon cooling the vapor, the liquid shale oil—an unconventional oil—is separated from combustible oil-shale gas (the term shale gas can also refer to gas occurring naturally in shales). Oil shale can also be burned directly in furnaces as a low-grade fuel for power generation and district heating or used as a raw material in chemical and construction-materials processing.Oil shale gains attention as a potential abundant source of oil whenever the price of crude oil rises. At the same time, oil-shale mining and processing raise a number of environmental concerns, such as land use, waste disposal, water use, waste-water management, greenhouse-gas emissions and air pollution. Estonia and China have well-established oil shale industries, and Brazil, Germany, and Russia also utilize oil shale.General composition of oil shales constitutes inorganic matrix, bitumens, and kerogen. Oil shales differ from oil-bearing shales, shale deposits that contain petroleum (tight oil) that is sometimes produced from drilled wells. Examples of oil-bearing shales are the Bakken Formation, Pierre Shale, Niobrara Formation, and Eagle Ford Formation.Outline of economics
The following outline is provided as an overview of and topical guide to economics:
Economics – analyzes the production, distribution, and consumption of goods and services. It aims to explain how economies work and how economic agents interact.Petro (cryptocurrency)
The petro, or petromoneda, launched in February 2018, is a supposed cryptocurrency issued by the government of Venezuela. As of August 2018 it does not appear to function as a currency.Announced in December 2017, it is supposed to be backed by the country's oil and mineral reserves, and is intended to supplement Venezuela's plummeting bolívar fuerte currency, as a means of circumventing U.S. sanctions and accessing international financing. On 20 August 2018 the bolívar soberano (Sovereign Bolivar) was introduced, with the government stating it would be linked to the petro coin value.Petrodollar warfare
The term, petrodollar warfare, refers to the alleged motivation of US military offensives as preserving by force the status of the United States dollar as the world's dominant reserve currency and as the currency in which oil is priced. The term was coined by William R. Clark, who has written a book with the same title. The phrase oil currency war is sometimes used with the same meaning.Pine Mills Oilfield
The Pine Mills Oilfield is an oilfield developed in the late 1940s and early 1950s located in Wood county, Texas stemming out from the townsite of Pine Mills toward US Highway 80 and the settlement of Crow, Texas. J.M. "Julius" DeuPree and his partner F.R. Jackson are credited with being responsible for the initial exploration of the Pine Mills Oil Field. He established the No. 1 Durratt near Pine Mills in 1949. DeuPree and Jackson were aided by L.A. Warren a land man for Sohio.Two test wells were announced by DeuPree and Jackson during the last week of September and early October, 1949. By this time the October 3 Wood County Record went to press, an official at First National Bank of Mineola estimated that approximately $300,000 in lease and royalty buying had been unleashed by the fact that oil flowed from the area's first discovery well.The No. 1 Duratt was gauged at 168 barrels per day as of October 6, 1949. Production was from top of pay at 4,793', the total depth of the well was 4,801 feet, and the elevation was 433 feet. The well was in the sub-Clarksville sand.The No. 1 Duratt set off exploration over a wider portion of the field. Mineral rights were leased from Pine Mills to US Highway 80 west of Crow and all the way to the Pine Mills townsite. The first wells in the area were going to be allowed to flow 100 barrels per day for thirty days a month.\
The second producing well in the Pine Mills Field was the Schio No. 1 Gordon Turner, and the well was reported to have struck approximately 22 feet of oil bearing sand the last week of October, 1949.The Pine Mills field continued its expansion and, early in 1951, the initial wildcat test well in the S. Holman Survey was done approximately a mile west of the Pine Mills Field, and reached oil in March 1951, extending the size of the field. The test well was believed to have cut in to a fault running north-south parallel to the Pine Mills Field fault. In April 1951, the B.B. Orr No. 1 Childress extension well in the Pine Mills Field struck oil.Texas oil boom
The Texas oil boom, sometimes called the gusher age, was a period of dramatic change and economic growth in the U.S. state of Texas during the early 20th century that began with the discovery of a large petroleum reserve near Beaumont, Texas. The find was unprecedented in its size (worldwide) and ushered in an age of rapid regional development and industrialization that has few parallels in U.S. history. Texas quickly became one of the leading oil producing states in the U.S., along with Oklahoma and California; soon the nation overtook the Russian Empire as the top producer of petroleum. By 1940 Texas had come to dominate U.S. production. Some historians even define the beginning of the world's Oil Age as the beginning of this era in Texas.The major petroleum strikes that began the rapid growth in petroleum exploration and speculation occurred in Southeast Texas, but soon reserves were found across Texas and wells were constructed in North Texas, East Texas, and the Permian Basin in West Texas. Although limited reserves of oil had been struck during the 19th century, the strike at Spindletop near Beaumont in 1901 gained national attention, spurring exploration and development that continued through the 1920s and beyond. Spindletop and the Joiner strike in East Texas, at the outset of the Great Depression, were the key strikes that launched this era of change in the state.
This period had a transformative effect on Texas. At the turn of the century, the state was predominantly rural with no large cities. By the end of World War II, the state was heavily industrialized, and the populations of Texas cities had broken into the top 20 nationally. The city of Houston was among the greatest beneficiaries of the boom, and the Houston area became home to the largest concentration of refineries and petrochemical plants in the world. The city grew from a small commercial center in 1900 to one of the largest cities in the United States during the decades following the era. This period, however, changed all of Texas' commercial centers (and developed the Beaumont/Port Arthur area, where the boom began).
H. Roy Cullen, H. L. Hunt, Sid W. Richardson, and Clint Murchison were the four most influential businessmen during this era. These men became among the wealthiest and most politically powerful in the state and the nation.Virginia Energy Independence Alliance
The Virginia Energy Independence Alliance is a broad-based coalition of consumers, industries, associations and academia from across Virginia that is committed to promoting the development and use of alternatives to foreign energy in Virginia. The Alliance strives to raise awareness of America’s need for energy independence, to work with local and state governments to encourage the pursuit of domestic energy sources, and to promote Virginia as a leader in the development and use of domestic energy.Yates Oil Field
The Yates Oil Field is a giant oil field in the Permian Basin of west Texas. Primarily in extreme southeastern Pecos County, it also stretches under the Pecos River and partially into Crockett County. Iraan, on the Pecos River and directly adjacent to the field, is the nearest town. The field has produced more than one billion barrels of oil, making it one of the largest in the United States, and in 1998 it remains productive, though at a diminished rate. Since fracturing has exploded in the Permian Basin, the Yates field has seen very heavy activity in the past 3 years. Estimated recoverable reserves are still approximately one billion barrels, which represents approximately 50% of the original oil in place (OOIP).