Many of you have suspected that something was fishy about this winter’s out-of-control natural gas prices. We still do not know all of the answers. But thanks to a report just released by four Midwestern Attorneys General, including Missouri Attorney General Jay Nixon, we now know that good old supply and demand does not tell the real story.
The report, which you can read at the link below, was prepared by renowned consumer advocate Dr. Mark Cooper. He reveals that we have been paying natural gas bills that are much higher than the actual market for this essential commodity should reflect. He notes many flaws in the unregulated system for the financial trading for natural gas could be contributing to skyrocketing increases.
Here is what he recommends:
-Oversight of the over-the-counter markets, including requirements for registration of traders and reporting of trades;
-Stricter limits on positions held by any one entity and expanded settlement periods for short- and long-term contracts, and restrictions on how much the price of natural gas can move on the markets before trading is temporarily halted for a “cooling off” period; and,
-A joint federal-state task force to examine critical questions about the supply-side of the physical market and the role of major oil companies, which straddle the physical and financial markets.
Attorney General’s press release—
http://www.ago.mo.gov/newsreleases/2006/030806.htm
The full report—
http://www.ago.mo.gov/pdf/NaturalGasReport.pdf
