Too much attention has been given to the recent budget talks. Though making a responsible budget is an important task, America faces an even greater problem that needs prompt addressing.
President Obama and his misguided energy policy is costing you more money than a tax hike ever will. Moreover, it’s helping ship U.S. wealth and valuable resources overseas while hardly receiving any benefit in return.
Obama’s policy has resulted in record-high crude oil exports, notably to China. This course of action has resulted in higher gas prices that recently pushed to $3.75 per gallon, where the Energy Department expects they will remain for some time. Runaway oil prices are a huge financial burden for the weakened economy.
Meanwhile, the price of natural gas in hovering around $3.50 per million thermal units (MMBtu). However, natural gas fetches $16.84/MMBtu in Argentina, $15.70/MMBtu in India and $19.75/MMBtu in Japan.
With more than 2.5 trillion cubic feet of recoverable reserves, the U.S. has more than a 100–year supply of natural gas, which currently produces a third of America's electricity. There is more than enough natural gas to go around. But the U.S. has rigid trade restrictions with how much can be exported, which is why there is such a massive price disparity on the global market.
So oil continues to be exported in mass to feed the energy appetite of the Far East. This increases the price you pay at the pump, and very little is being done to change that.
On the other hand, we’re not loosening natural gas trade restrictions, which prevent the government (taxes) and businesses (net profits) from taking advantage of a huge spread that could reduce the deficit and add points to GDP. Instead we let natural gas sit in storage containers and import just under nine million barrels of crude oil per day, widening the trade deficit.
The U.S. should be exporting its natural gas to take advantage of the huge price discrepancy while it still exists. Yet we’re not.
Obama’s policy adds insult to injury by not promoting natural gas usage at home. It’s concerning that government officials have not pushed forward plans to develop new natural gas technologies. Natural gas is a wonderful fuel alternative as diesel prices climb due to high crude prices. But we’re not properly nurturing natural gas technology, causing its usage to stagnate.
Despite a major plunge in natural gas prices, from as high as $15.78 (2005) to as low as $1.90 (2012), total consumption has stayed the same.
We will continue to depend on imported oil unless we embrace and support natural gas technology or some other fuel source here at home. Natural gas is abundant, cheap and more practical to transport than ever before. Liquefied natural gas has an energy density 2.4 times greater than compressed natural gas (previous form of transport). Also, natural gas that has been liquefied takes up to 600 times less volume than it does in the gaseous state.
So using natural gas to replace oil and coal until a renewable energy source emerges makes a ton of sense. We’re seeing increases in natural gas usage from trains and trucks, but this growth is coming from such a small base that its impact is hardly noticeable.
The energy policy we’re following is not only unstable, it’s borderline ridiculous. We ship valuable resources overseas when we could be using them here at home to address high gasoline prices. What’s worse is that we import crude, too, which sends U.S. wealth out of the country that doesn’t come back. And what really gnashes my teeth is that we aren’t utilizing our biggest advantage. Not only can natural gas be exported for a massive premium (that could reduce our deficit), we could use it at home to take pressure off fuel prices.
Natural gas is America’s number-one resource, and right now we’re letting it sit on the bench.
Obama needs to rectify this trend before it’s too late. And I believe the administration will. Though oil exports may continue to increase, natural gas is going to be a bigger player on the global stage. I’ve written a report detailing why natural gas usage will soar in the U.S., potentially leading to huge growth abroad, too. This report not only told readers of Top Stock Insights how natural gas will shape our country’s energy allocation, it also provided two companies that stand to benefit most from it. Click here to get your copy.