How the global demand for oil is rising while supplies are unevenly available; how oil supply and prices are affected by international relations and the economy; and the costs and benefits of exploiting new conventional and unconventional sources.

What this dot point is asking

This is Edexcel GCSE Geography B (1GB0) Paper 3, Section C (Topic 9, Consuming energy resources). Edexcel expects you to explain how the global demand for oil is rising while reserves and production are unevenly distributed; why oil consumption is growing (rising per-capita GDP, rapid industrialisation in emerging economies); how oil supply and prices are affected by changing international relations (conflicts, diplomacy) and economic factors (recession, boom, over- or under-supply); and the economic benefits and environmental costs of exploiting new conventional and unconventional sources (tar sands, shale gas) in sensitive areas. Oil price and production graphs are common resources.

Rising demand and uneven supply

Global demand for oil is rising, but the world's oil is not evenly shared.

What moves the oil price

Because oil is traded globally and supply is concentrated, its price is volatile.

Exploiting new and unconventional sources

As the easiest oil and gas reserves are used up, there is growing pressure to exploit new areas.

New conventional sources are being developed in ecologically sensitive and isolated areas (for example deep offshore or in the Arctic), which brings economic benefits (new reserves, jobs, energy security) but environmental costs and high risk in fragile environments. Unconventional sources go further: tar sands (oil-rich sands needing energy-intensive processing) and shale gas (extracted by fracking, pumping water, sand and chemicals underground to crack the rock). These unlock large reserves and improve energy security, but cause serious environmental damage: water pollution and high water use, methane leaks, landscape disturbance, and the risk of minor earthquakes from fracking, often in sensitive areas, while still producing greenhouse gases.

Try this

Q1. State two factors that can cause the price of oil to rise. [2 marks]

• Cue. Any two of a conflict or instability in producing regions, supply cuts by producers (OPEC), an economic boom raising demand, or an under-supply of oil.

Q2. Explain one environmental cost of extracting shale gas by fracking. [3 marks]

• Cue. Fracking can pollute groundwater with chemicals, uses large amounts of water, can release methane (a greenhouse gas), and risks triggering minor earthquakes, often in sensitive areas.