RH131-03, Rhetoric and Composition: The Role Of Government In Entrepreneurship

Clarence Cheng
Professor Terence Hartnett
RH131-03, Rhetoric and Composition
17 February 2017
The role of government in entrepreneurship
Essay #4
The Role of Entrepreneurship in the Industry of Energy: How Has The Privatization of Energy Companies Had Effects On The Energy Market?
The United States energy requirements have risen in recent decades. The rise driven by an increase in industrialization CITATION UsE16 \p ": eia.gov/" \l 1033 (US. Energy Information Administration: eia.gov/).. Where energy is essential to powering the factories of the US. This has led to increased debate on the price of energy. Noting, high energy costs are eventually passed to the consumer through high prices. Despite, repeated attempts by government to lower the cost of energy, this has not been effective. There is thus need to utilize new means to revolutionize the manner in which energy is produced. Entrepreneurship and privatization have the capability to bring in private sector efficiencies into energy production CITATION USE16 \p ": eia.gov/" \l 1033 (US. Energy Information Administration: eia.gov/).. Privatization and entrepreneurship however, also face stiff opposition from a section of the population. Arguing, that a function as important as energy production should not be left to the private sector. Noting, the main aim of the private sector is profit and not service. The paper therefore seeks to examine the dichotomy of entrepreneurship and privatization in relation to energy production. The role of entrepreneurship in the energy industry and how privatization affects the energy market.
Discussion
The production of energy in the US is a hotly contested debate. Where the politics of energy affect entire communities and governments. The US government under President Obama has moved to curtail the nation's reliance on energy. This move partly informed by the need to reduce the carbon footprint of its energy usage. Noting that fossil fuels account for 81% of its energy production. The move also had a national security perspective. Where the US' appetite for oil and other fuels spurred its involvement in global conflicts. Its attempt to keep the World’s shipping lanes open and allow unfettered access to crude oil tankers headed to the US.
Adoption of technology has revolutionized the manner in which energy is produced in the US. Where shale fracking technology has made the mining of natural gas more efficient. It has also made it less environmentally challenging. This has resulted in the US dependence on international oil markets to reduce. Coal production has been on the decline for the past decade beginning in 2008. The global demand for coal has gone down. As more efficient energy sources have come on line.
The greatest challenge in the production of energy has been to ensure that the production is efficient and cost effective. This factors working to ensure that such energy will remain competitive in the global markets. The government has in modern times experimented with ways through which this can be done. The adoption of technology is a key driver of this enterprise. Entrepreneurship can be another means through which these objectives are metCITATION MZJ15 \p ": 2110" \l 1033 (Jacobson: 2110).
The government has largely driven energy production in the United States. The government supporting the industry through subsidies, tax breaks and other means. This is because the industry is capital intensive. Thus, entry into the industry has consistently been prohibitive. There has been a consistent cyclical cycle in energy prices since the 1980s. Where there is a general rise in prices followed by a fall. Prices of electricity have remained high in the past decade. Efforts by the government to bring them down only resulting in cosmetic and minuscule reduction. The result has been a general understanding that the state is ill-equipped to bring efficiency and optimize the use of resources to manage the energy requirements of the US. The result has been an ongoing debate as to the efficacy of the privatization of energy production.
Privatization refers to the transfer of ownership of an asset from a government to private hands. It is the converse of nationalism, where private properties and assets become state owned. Privatization can occur through the state divesting its ownership in energy producers. It can also occur through deregulation. Where the government purposely reduces the legal barriers to entry into the sector. The government can further act to support privatization by offering financial and non-financial incentives. These include tax breaks, subsidies, offering land to energy producers, etc. Privatization is the means through which entrepreneurship is introduced into the energy industry.
The efficacy of privatization can be noted. Where state divesting from energy assets frees up needed capital. Allowing the government to invest in other areas of the economy that require such investment. Privatization is a function of entrepreneurship. Thus the entrepreneur will attempt to increase their profit margins by optimizing the production process. These cost sav...