Why is it that natural gas sells in the
U.S. for $3.94 per 1,000 cubic feet and in Europe and Japan for $11.60 and $17,
respectively? Part of the answer is our huge supply. With high-tech methods of
extraction and with discovery of vast gas-rich shale deposits, estimated
reserves are about 2.4 quadrillion cubic feet. That translates into more than a
100-year supply of natural gas at current usage rates. What partially explains the high European
and Japanese prices is the fact that global natural gas markets are not
integrated. Washington has stringent export restrictions on natural gas.
Naturally, the next question is: Why are there natural gas export restrictions?
Just follow the money. According to OpenSecrets.org, The Dow Chemical Co.
"posted record lobbying expenditures last year, spending nearly $12
million, and is on pace to eclipse that number this year." The company has
spent hundreds of thousands of dollars contributing to the political campaigns
of congressmen who support export restrictions.
Natural gas is a raw material for Dow. It
benefits financially from cheap gas prices, which it fears would rise if
Congress were to lift export restrictions. Dow argues, "Continuing
optimism for U.S. manufacturing is founded on the prospect of an adequate,
reliable and reasonably priced supply of natural gas." Of course, Dow and
other big users of natural gas get support from environmentalists, who are
anti-drilling and anticipate that export restrictions will serve their ends….ToRead More…..
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