20 Experts Who Say Drilling Won't Lower Gas Prices

[Bill USA]

4. that's not all. With all the talk of increasing gas/oil prices nobody has mentioned that West Texas

INtermediate oil which for decades was priced at about 6% to 8% HIGHER THAN North Sea Brent (basically, all oil from outside the U.S.) in about 2005 started going down in price relative to NSB. When we got into 2011 the concerns about how the Arab Spring might affect oil supplies, and then even greater concerns about Iran's progress towards building a nuclear bomb caused speculators to push up the price of oil. But the price of WTI didn't go up as much as NSB. In fact WTI averaged 14% lower than NSB for 2011.

NOw why was that? The decline in the premium paid for WTI just coincidentally occurred right as we started producing ethanol in significant volume (in 2010 ethanol was meeting about 105 of our fuel needs). When a risk factor came to be applied to the price of oil this magnified the impact of ethanol bringing it's impact on WTI to lowering what had been priced at 6% to 8% above NSB to 14% BELOW NSB. The total swing in price is 20% to 22%. This is because 10% of our fuel supply is being met by ethanol.

But, interestingly enough, nobody is talking about this!