Editing 79-02-A2 (section)

= OPEC =

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=== Transcript ===
The OPEC oil producers have told us the price of oil is going
up and our energy agency has informed us that will call for an increase
at the gasoline pump. But before we call them greedy monsters, guilty
of adding to inflation, let me play the devil's advocate.

OPEC oil is priced in American dollars. I n the last few years our
dollar has been going down in value relative to more stable currencies
such as the West German mark and the Japanese yen. And, guess what?
The actual price of oil for Germany and Japan has been going down.
It's pretty obvious that if $14 will buy a barrel of oil, but 14 American
dollars now are only equal to a lesser number of marks or yen, then the
Germans and Japanese are getting their oil at a lower price. The OPEC
nations have to "up" the number of dollars they get just to stay even.
And it is we who are responsible for reducing the value of the dollar.

That is only a small part of our foolishness. With some plain
common sense we could break up the OPEC monopoly. Item number 1 --
there are vast quantities of natural gas available in the U.S. if our
own government regulations did not stand in the way of it being produced.
This untapped natural gas would break the back of the OPEC cartel.
A deplorable tragedy was preventable and unnecessary in the bitter
winter of 1976-77. There was cold and discomfort in homes, but even
worse, was the loss of jobs, production and income as industry had to
shut down for lack of fuel.

We had been warned in 1974 that we were in danger of running out
of natural gas. Part of the problem is that deeper wells must be drilled.
It costs $3 million to drill a 20,000 foot well in Texas. Off-shore
wells can be drilled for $1 million, but it takes several years to get them
into production. These harder-to-get-at gas deposits cannot be delivered
to the pipe lines for the price the government allows them to charge.
So that gas is neither drilled nor delivered. You can't sell a pencil
for a nickel if it costs a dime to make it.

Right now in my own state -- California -- a shortage of natural gas
exists, and it's getting worse. If we substitute coal or oil we aggravate
an already serious smog problem. It is estimated that California could
lose 800,000 jobs by 1981 because of reduced gas supplies. We are currently
buying liquified natural gas from Indonesia for $3.50 per 1,000 cubic
feet. A study by the government's own Energy, Research & Development
Agency tells us that at $3.25 and below, there is enough natural gas
available for hundreds of years. This study was done in 1974 and nothing
has been done about it.

The magic word is "decontrol" of the well head price. It would
take about five years lead time to get much of this production under way
and we'll have shortages for those five years. This wouldn't have been
true if we'd gotten under way in 1974. But decontrol now and production
of the gas available in our own land would literally break up the OPEC
cartel. What are we waiting for?

This is Ronald Reagan.

Thanks for listening.
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<TR><TD WIDTH="150">Batch Number</TD><TD WIDTH="150">{{PAGENAME}}</TD></TR>
<TD>Production Date</TD><TD>01/19/[[Radio1979|1979]]</TD></TR>
<TD>Book/Page</TD><TD>[[Radio_Commentary_Books#Reagan:_In_His_Own_Hand|RihoH-321]]</TD></TR>
<TD>Audio</TD><TD></TD></TR>
<TD>Youtube?</TD><TD>No</TD></TR>
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===Added Notes===

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