The NYTimes Op-Ed Militates For Higher Oil Prices and Fewer American Jobs in Thursday's NYTimes Op-Ed "Let Our Oil and Gas Go"
Mr. Steven Rattner demonstrates that he lives in an oil industry induced fantasy whose preachments have seduced the public, our government, our press in the misguided belief that the price we are paying for oil through such oil based commodities as gasoline, diesel, heating oil and on, is a market derived price reflective of actual supply and demand. Nothing could be further from the truth and Mr. Rattner's musings go far enough to earn him an honorary membership in the American Petroleum Institute or a seat of honor at the next convening of the Organization of Petroleum Exporting Countries(OPEC) or a seat on the board of one of our Commodity Exchanges or one of their kindred institutions. Absent from Mr. Rattners Op-ed is the realization that oil is no longer primarily a commodity but rather has become a financial instrument. Some 30 contracts are traded on the exchanges for each barrel of oil produced, not in measure by oil producers nor oil consumers hedging their needs but rather in massive measure by speculators, and seemingly in many cases by manipulators who have the wherewithal to move the markets in directions that maximizes profits and political ends.
Unquestionably exporting oil and subjecting it to the machinations of world market prices would punish the American consumer to a greater degree than is presently the case. As Mr. Rattner reports, we are still importing some 6 million barrels a day, enough to make our market responsive to world oil prices and therefore responsive to levels manipulated by the OPEC cartel and prices formed on world commodity exchanges operating without a modicum of meaningful visibility.
In turn the price we are paying for natural gas is a price untouched by world markets in that we neither import nor export natural gas, we are fully self sufficient and therefore our gas prices are under the clear auspices of our anti trust laws and in turn under the vigilant eye of our Justice Department and Federal Trade Commission.
The result is staggering in comparison. Our price for natural gas is currently quoted at less than $4.00 mmbtu which compares to gas being sold in world markets as in Europe by the likes of Gazprom of circa $15 mmbtu. That enormous differential is motivating European chemical companies to move manufacturing facilities and jobs to the U.S. and making our chemical industry among the most cost effective in the world. Not least our natural gas bounty is reducing pollution on massive scale by replacing natural gas for coal in power plants throughout the country.
By the way, giving you but one example of how much we are overpaying for oil, know that the power generated by 6 mmbtu units of natural gas is the equivalent to the energy generated by one barrel of oil. In other words six mmbt units of natural gas at $4.00 would deliver at $24 (6 x $4.00 per mmbtu) as much energy as one barrel of oil currently priced at $101/bbl.
Is someone in our government taking cognizance?