Why is there such a high ratio and differential between natural gas and oil right now?
Fadel Gheit: Because oil is a global commodity; gas is a regional commodity. You can have a huge discrepancy in gas prices from country to country, from continent to continent, because of a lack of adequate transportation— the means of shipping to take gas from where it’s found in abundance to where it’s needed. For example, gas in the Middle East has no value because there is no local market for it. Most of the oil-producing countries actually flare gas because, basically, they use gas, you call it, as a drive. They use gas to pump it back in the oil field instead of water, because they don’t have water, so they use natural gas that comes as a co-product with oil to pump it back into the wells to push oil because that’s what they want. They want oil; they don’t want gas. We do the same thing in the Alaska North Slope. The oil companies that operate the fields put away the used gas to push it back into the oil field to lift up oil because there is no pipeline to take the gas into the l
