Oil hits $78 dollars a barrel

That was on the spot market but it is about double a year ago. Per a Texas oil man, you can go here and look at the spot price of natural gas at the Henry Hub (bottom of the page), multiply it by six, to adjust for energy equivalence, and that should be the price of a barrel of oil. For 23 Dec 2009, that is 5.590 x 6 = $33.54 per barrel of oil. Why the difference? Little domestic production and speculation. A falling dollar also makes a barrel of oil more expensive. Even if the cost of recovering oil had increased by two thirds making the multiplier = 6 (on BTU basis) + 4 (increase cost of oil recovery), a barrel of oil would still be only $55.90 per barrel domestic.

Doesn’t this make our nation’s energy policy look terribly wrong? Only a bureaucrat would think you can go green in a few years. That would be like JFK deciding we should go to the moon in two years. Going green, and it is worth working on, will take at least a decade or more. Unless your objective is to spend a lot of money with little or no return.

Share and Enjoy:
  • Print

Related posts:

  1. Cap & Trade Bill – The real cost
  2. Opportunities of Crisis
  3. Cash for Clunkers
  4. Natural Gas Changes the Energy Map
  5. Spending Recap

Comments are closed.