Letters to the Editor

Supply, demand drive oil price, not speculators

America does not have an energy policy. It has an environmental policy, which is more about politics than conservation.

We're told the high price of gasoline is the fault of "speculators." Either the administration does not understand the futures market, or it chooses to ignore its value. Future traders perform a valuable service for all commodity markets, not just oil. They permit buyers and sellers to purchase and sell commodities well into the future.

The traders price commodities based on how they see their future. Right now, they see the future of oil as having high demand for a low supply, with a weak dollar and unrest in the Middle East. They also see that while America has an abundance of oil and gas on our land and off our shores, our government prevents it from being explored.

If the Obama administration lifted the moratorium on American exploration, the futures market for oil and gas would collapse almost overnight before a single well was drilled. Exactly what happened in September 2008 when President George W. Bush lifted the ban on drilling. Remember gasoline went from $4.12 to $1.86 a gallon, within weeks of that announcement.

Lastly, did you know that the drilling site in the Arctic National Wildlife Refuge in Alaska is only 74 miles from Prudhoe Bay, which is the beginning of the Alaskan pipeline? It has the capacity to carry all of the known oil at the ANWR site to Valdez. Think what an announcement to drill there would do to the price of gasoline.

Tom Hatfield

Hilton Head Island