Heating gas:
Suit says oil companies hold back supplies to drive up price

Jan 2, 2006

The Alaska Gasline Port Authority filed suit against BP and ExxonMobil, two of the largest oil companies in the world, accusing them of conspiring to withhold natural gas from the mainland U.S. David Boies, a lawyer for the authority, said the two companies conspired “to preserve the scarcity that has driven natural-gas prices to historic highs.”

These two companies already produce 9% of U.S. heating gas in the mainland. Together they own 37 trillion cubic feet of natural gas on Alaska’s North Slope (unrelated to the Arctic National Wildlife Refuge), enough to supply the heating needs of the entire U.S. for two years. But there is no production of natural gas going on now in Alaska. That gas which is produced in oil wells is injected back into underground reserves rather than being shipped to the mainland.

This withholding of natural gas from the U.S. is what is driving the price of gas up. In recent years many electrical generating plants have been built that burn natural gas, but no new sources of natural gas have been opened on the mainland to meet the increased demand.

These privately owned companies have a stranglehold over a commodity that is of vital concern to all of us. Just like the oil companies have gotten away with raising the price of gas for our cars to more than $2 a gallon, which they want us to think is fine after $3 a gallon, now these same oil companies are purposely holding back production of natural gas to gouge us during the winter.