Nationalize the Oil Companies

[JackRiddler]

Poll question: Nationalize the Oil Companies

Exxon recently announced the highest corporate annual profit ever at $40 billion, and all they had to do for it compared to the previous year was watch the oil price rise. Rockefeller family shareholders put in an initiative to re-direct some of that to development of alternative energies. The management opposed it and the modest resolution was voted down. Oil was just too profitable not to reinvest the full amount back into drilling for it, anything else would be irresponsible to the highest value on earth, which is shareholder value.

See http://money.cnn.com/2008/05/27/news/companies/exxonmobil_shareholder_meeting/?postversion=2008052816

Capitalism at work - private corporations have incentives to to remain on the course of insanity. The market system clearly is warped.

Short of nationalizing the oil multis, you could put a windfall tax to raise $50 billion off the oil multis. You could take $100 billion more out of the Oil Protection Expeditionary Force (a.k.a. the Pentagon) and use the $150 billion (long as dollars are still good) and maybe even keep spending $150 billion a year as follows:

- development of genuinely renewable and clean alternatives, solar and wind first, with a more cautious approach to hydro and geothermal
- state-owned car company puts out the same electric compact cars that the private auto industry decided to kill
- rebuild the railways and make them CHEAP; subsidize their infrastructure (and make the highways pay for themselves through a gas tax)
- light surface rail and trolley cars for cities -- and why not bike paths and ped zones?
- enforcement of a much higher MPG standard, with an incentive or two
- efficiency initiatives, especially for building heating (number two source of energy consumption after vehicle fuel)
- follow the lead of Apollo and the Manhattan Project and gamble a few billion dollars on unlikely-sounding miracle alternatives, including a stab at clean fusion possibilities

I'm sure others have ideas they'd like to add.

[sam sarrha]

1. funnel all th profits to renewable sources, This's a matter of national security & national survival

[roguevalley]

104. the neither count blows my mind. I guess some people don't

mind getting screwed by plutocrats, who laugh about fucking over old people and the rest of us. NATIONALIZE! NOW!

RV, more socialist than anything else i guess. :)

[dkf]

2. If we seize the oil companies why would any other

country respect our oil company's leases? Why won't they take back everything too?

Then we have oil companies with no reserves, other than in the US, and that would be waaaaay less than we need.

And refineries aren't the problem anymore. Look at refiners profits...they are way down.

[benedikt15]

8. National Oil Companies

Most producing countries have nationalized ownership of oil. We are on good terms with Saudi Arabia and its major oil company company which was formerly largely owned by Exxon (with minority interests owned by other American companies. Today the American companies manage most of the exploration and production, on production sharing agreements. The American owners were compensated (partially) for their lost property, bit their lips at their reduced share, and have grown even richer. In contrast, when Mosadegh seized the Iran wells from the British-US joint ventures, the CIA pulled off a coup in 1953, put the Shah in power, and began a process which ended with the Iranian "students" seizing the American embassy hostages in 1979, which led to world-wide inflation, election of Ronald Regan (who traded arms for hostages) and the endless enmity between the U.S. and Iran.

[Rage for Order]

103. Also, how would it help us, exactly?

All of the major oil companies combined only control about 5% of the world's oil reserves. They have to buy the rest of the oil they sell, just like everyone else.

[taught_me_patience]

3. Hell no

This would be an insane idea. Production would fall precipitously.

[Xenotime]

106. Hell yes

it would save the economy and the environment.

[benedikt15]

4. Regulate the Oil Racket

Nationalizing the oil companies would be a terrible mistake. Inevitably interest parties would seize control (as in Mexico) and the public interest be damned. Governments simply cannot manage efficiently. The reason is that with unionization, management loses control of the organization. Consider the post office. Consider the Department of Energy. There are some ok government corpora tons -- some of the power administrations may be okay, but overall, world wide government ownership of the means of production is a quick drop to ruin.
Free competition is sometimes good for growth, if the monopolists can be kept at bay. But consider the government grants of monopoly -- patent and copyright. Millions die before they have to because the price of drugs is kept unnecessarily high. Should downloading a song cost 99 cents, or a book $10. We could imposes government price controls in exchange for the grants of monopoly -- like power companies. The regulatory commissions would have tobe filled with consumer advocates, not political hacks like today.
Finally, we need a general value added tax, and a carbon tax, not ad hoc oil taxes that exploit consumers and mis allocate resources.

[TooBigaTent]

5. The "public interest" is being so well cared for by the corps as they now operate, right?

And stating that "governments simply cannot manage efficiently" is directly from Page One of the GOP handbook.

It is who in government is running the show and what THEIR priority is that matters. If it was truly a government "of, by and for the people" then it would be managed efficiently and beneficiently.

[anigbrowl]

20. No, which is why better regulation is needed. Not nationalization.

"And stating that "governments simply cannot manage efficiently" is directly from Page One of the GOP handbook."

Indeed, but it's directly from page one of most economics textbooks as well. Government is good at long term infrastructural investments because it can pay for them and spread the cost through owers of taxation and so on. But in general, it's rather poor at resource allocation and suchlike compared to a free market (by which I mean a properly regulated and transparent one, in which attempts at manipulation can be quickly spotted and rejected by other participants).

The main reason the Us won the cold war is because Reagan kept upping the ante on defense spending and Soviets, already engaged in a rather foolish war in Afghanistan, felt obliged to keep following up by increasing their defense spending. Because their economic approach was so centralized, it eventually collapsed under the financial strain because Marxist economists have a rather poor understanding of how to leverage capital. Effectively, we pulled out a credit card and made them use up all their cash competing with us. When they ran out of cash their economy froze.

Now, the Soviet economy had a completely different approach to property, taxation and so on, so this wasn't quite as drastic as it might sound (the results would be very different if the same thing occurred here). But my point is not to revisit the cold war but to point out that centralized economic policy as practiced there did not work well. I visited to the USSR in the 1980s and while I liked the people a great deal and even found some things to admire about their system, it was really bad at handling anything more than basic necessities (and not even very good at that). Even simple things like shopping were made complex by excess bureaucracy; the whole society was organized on the principle that any economic exchange had a potential for capitalist exploitation, so all economic transactions (even grocery shopping) had to be heavily regulated. Of course, the result of such a policy was that everyone tried to maneuver themselves into positions of oversight in order to cream off a bit for themselves. The costs vastly outweighed the benefits.

You might want to look at some countries where oil etc. is nationalized and examine their economic flaws. A few very small countries like Dubai are making out like bandits due to the luck of the draw and populations small enough that there is more than enough cash to go around, make all the citizens rich, and invest for the future too; unfortunately most are in a situation something like bolting a 747 jet engine onto a passenger bus. They have enormous economic power thanks to the fact that they have easily accessible oil, but have not built suitable economic vehicles to make the most of that power.

Venezuela is one example; they actually had a functioning national oil company that worked in concert with private oil companies, but after Chavez came to power the oil sector got heavily politicized. Eventually the engineers went on strike because they were being so badly managed, and Chavez fired several thousand of them. The army was sent in to manage the plants, but had no clue how to do so and a number of them had to be shut down. Eventually about half the engineers were rehired and the shortfall made up by importing some and offering retirees bonuses to return to work. But in the meantime, production capacity was damaged because the wells and refineries were not shut down in an orderly fashion and the state company lost about 50% of its production capacity. Chavez responding by imposing big new taxes on the (American) private companies there, but before long they decided it wasn't worth their while and simply sold their leases back to the government. Overall oil production in Venezuela is off probably 25% or so of what it could be thanks to poor management by Chavez, or about a million barrels per day, the profit from which is now lost to the citizens of Venezuela (if you don't manage an oil deposit correctly you can screw it up and make it impossible to extract the oil later because of geological factors).

[mhatrw]

88. Because Chavez's political enemies sabotaged his nationalization

of Venezuela's oil industry, nationalization of energy doesn't work in general?

[anigbrowl]

94. I keep pointing out that Venezuela's oil industry was already nationalized.

It's been nationalized since 1976. Is it so difficult to check facts first?

I'm not suggesting that Chavez is without enemies who would like to see him fail, both within and without the country, but observing that some of his policies have had negative results (eg a significant loss in output capacity) is just factual. If fans of Chavez etc. want to pin the strike on 'class enemies' or suchlike they can do so with a fact-based explanation. If Chavez himself felt this to be such a problem, perhaps a little more forward thinking on his part would have avoided the shutdown.

I guess I'm wasting my time trying to post a detailed opinion for discussion (including disagreement) if people are just going to respond with inaccurate one-liners.

[JackRiddler]

119. A tangential point about the Soviets

The main reason the Us won the cold war is because Reagan kept upping the ante on defense spending and Soviets,

Something happened, but what was the "cold war" and how was it a game to "win"? These terms can transport implicit ideology or, in other cases, simply obfuscate.

Reagan didn't cause the collapse of the Soviet Union, and hardline Western policies may have if anything extended its existence. The Soviets were not the target for the defense build up that actually Carter had already started; they were the excuse.

The Soviet Union lost its Eastern European satellites and broke up into its constituent nations because this is what was built into the situation from the beginning. The Moscow dictatorship from Stalin had been imposed on most of them by force of arms. The Eastern European peoples always wanted out, as the uprisings of 1953, 1956, 1968, 1970 and 1980 demonstrate.

The system already failed to impose any sense of faith in it among the people by 1961, and by that date also failed in the economic competition quite independently of the arms race, which is why the Berlin Wall was built.

If there was a decision made in the West that speeded up the process of captive nations departing a dictatorial system, then more than anything it was the early 1970s move to Ostpolitik and detente that the likes of Reagan opposed. Eight million West German visitors to East Germany a year did more to undermine the regime in the latter than all the world's Peacekeeper missiles, or the invitation to achieve bankruptcy from military spending (something that ultimately hit the US as well) that the Soviets, had they been smarter or less of a dictatorship, might have never fallen for.

[JackRiddler]

120. As for Venezuela...

That country is in an open class war, and it wasn't Chavez who started it. He so far has won it for the majority who traditionally lost it. The minority is very stubborn about undermining him in any way, and if so many experts who were very well qualified to run an oil company had to be fired, then this may be because they participated in the sabotaging of the government by way of the 2002-2003 lockdown of the company, which you may remember came on the heels of a failed coup backed by the CIA. What's incredible in all this is that the Chavez government has remained democratic throughout; in many countries it would have turned into a dictatorship or Stalinist regime merely to survive. No doubt this has led to a decline in technical expertise at the company, and a lot of other distortions in the oil business.

[zorahopkins]

6. Oil Is OUR Resource.

Oil is our resource. It belongs to THE PEOPLE.

It does not belong in the hands of Big Corporations who exploit it for profit.

It should be used for the interests of all Americans -- not just Big Oil sharholders!

Nationalize Big Oil NOW and have Congress Force the prices DOWN!

[benedikt15]

9. A few details

Under the American 5th Amendment, the Government may seize private property for public use if due process is observed and just is paid. U.S. oil companies (including BP) produce about 40 per cent of American needs. We have already hit "peak oil" and no one expects us to be able to maintain production. The major oil companies own the refineries, some of the tankers, and the U.S. pipelines. They have contracts or ownership of foreign oil fields. Many of these contracts have poison pills or withdrawal penalties that protect both parties, Very often they are inextricably involved with the source countries. Any attempt of the U.S. Government to seize these interests in foreign countries, could easily be met by seize and condemnation or simple counter offers (by foreign companies, like from China) which by increasing the market value of the properties would increase the compensation the U.S. Government would have to pay. Even at going prices the badly indebted U.S. Government could pay in "cash" only by issuing more bills and bonds (probably in the trillions). The dollar would fall even further. We have much better things to do with our money, such as develop and deploy other energy sources, thus increasing the world's energy supplies, and reducing prices below what they would otherwise be.

[anigbrowl]

14. American oil is our resource. Middle East oil, not so much.

I don't care for the sarcasm tag, and it doesn't fit in titles anyway.

If we nationalize the oil companies, then we would probably have to let the various countries like Saudi Arabia nationalize their operations in those countries. The result would be a terrible mess, somewhat akin to trying to change the direction of a ship going the wrong way by rebuilding it at sea so it was pointing in the other direction. I strongly favor more regulation and probably a windfall tax, but attempting to nationalize would be hugely counter-productive.

Also, you need to consider that a relatively small portion of oil is produced domestically. Gas and coal are more likely candidates, but in fact most mineral exploitation involves royalty payments to the state government in which the minerals are located. I am NOT endorsing the system as is, just pointing out that your post seems oblivious to the fact of how and where our fuel is produced.

[DadOf2LittleAngels]

15. Ummm we have no oil

We import it! Yes yes I know we throw a barrel up here and there but even *if* I greed that any resource we have should be nationalized (which I dont) there are no US basically no really productive oil fields to nationalize..

So IOW you're talking about nationalizing companies that import oil and refine it and run assets in other nations (not our resources)

If you logic is that anything that is a natural resource within us borders should be nationalized I suppose you'll want to be taking farmers land from them... what right do they have to profit off of *the peoples* fertile land..

[AngryAmish]

7. I'm sure that would work out well.

[jpljr77]

10. Other: Force them to withdraw from the stock market

So much of the lost efficiency of energy producers (and healthcare providers, fwiw) is due to dividends and other expenditures required of publicly-traded companies. So force them to go private again.

Yeah, I know this would lead to wealth accumulation in the small # of owners rather than anyone buying the stock, and the companies would be much less transparent. But this whole stock market experiment is just crushing the end consumer of vital industries. Most industries should be allowed to remain public, but some should not.

[kentuck]

11. Nationalize the refineries and buy the oil on the world market...

If we can get it from Mexico or Venezuela at a better price, then that would drive the price down. Also, build a few more refineries. Of course, we should invest in wind and solar, but that will probably take years to happen. In the meantime, we take control of the refineries. We, the people.

[anigbrowl]

31. Why do you think that refineries are the bottleneck?

Refinery companies are not making massive profits at present. They have made a lot of money in the last 5 years, but on the other hand they had years of losses back before that due to overcapacity. When you allow for the cyclical factors, refinery companies have done well but not spectacularly.

[kentuck]

50. Without the refineries, there is no gasoline.

If they are running at 85% capacity, don't you think that is a little low? And they shut them down whenever they want for "maintenance". They can create a "shortage" anytime they wish. They shouldn't have that capacity.

[anigbrowl]

60. That doesn't mean they're the bottleneck

Gas consumption has fallen significantly over the last 6 months. A year ago refineries were operating at closer to 95%. Also, refineries don't set the price of oil, nor do they just pass on the whole price increase to consumers, but also take a hit on their margins when oil goes up. I think your understanding of this is a bit too simple.

Here is some historical data on gas refineries; as you can can see, capacity swings around quite a lot. http://tonto.eia.doe.gov/dnav/pet/pet_pnp_cap1_dcu_nus_a.htm

[kentuck]

76. You make it sound like these are some type of Mom and Pop operations??

and that the oil companies have absolutely nothing to do with the refineries or how much of one fuel is made as opposed to another and that have absolutely no control over the production of gasoline?? Is that what you believe?

[anigbrowl]

80. I never said any such thing.

I just responded to your data point about refinery usage by pointing out that that the current figure is not the whole story.

[kentuck]

96. I saw your chart from the Dept of Energy...

That tells me nothing. What else do you know about the refineries that you can tell us? In simple language?

[anigbrowl]

99. OK. If you look at the second section

"Atmospheric Crude Oil Distillation Capacity", you can see it's divided into operating and idle. As you can see, in recent years the idle capacity has been much lower than it is just at present. Part of the reason for that is a drop in demand caused by both a mild winter and people trying to reduce their use of gas in general over the last 6-12 months. So I'm saying that the fact they're operating at 85% of capacity right now doesn't necessarily mean they're deliberately holding back gas from the market.

[Tierra_y_Libertad]

12. Eeek! Hugo nationalized the oil industry!! And, look what happened there! $.12 per gallon.

[anigbrowl]

24. Two big mistakes in one sentence!

1. The oil company was nationalized long before Chavez came to power. It was largely left alone to be run by people who knew how to run oil wells and refineries, and worked alongside two American companies who had reasonable lease terms. Chavez didn't nationalize anything, but he did replace the management with political hacks who made a mess of the oil company and permanently damaged capacity.

2. 12c a gallon gas in Venezuela is thanks to massive subsidies by the government. this is only possible because of the high price of oil on world markets right now. If prices returned to what is (probably) a more sensible level of ~$60/bl then gas prices in Venezuela would have to go way up. Chavez is surfing a short-term economic trend, but not very sensibly.

[Tierra_y_Libertad]

33. That's one mighty big "if".

However, the capitalists, being the altruistic sort they are, may, out of the goodness of their munificent hearts, decide to cut off their profits.

:rofl: :rofl: :rofl:

[anigbrowl]

40. Your reasoning is rather backwards

Other factors ranging from regulation OPEC increasing production could push the price of oil sharply downwards in the relatively short term, without any nationalization taking place. Prices are not solely under corporate control. Regardless of how this occurs, Chavez is in the dubious position of future revenue being dependent on forces outside his control, as there are narrow limits on his ability to raise domestic oil production in Venezuela and thus manage prices in that economy. He is a smart politician but no economic genius.

[Tierra_y_Libertad]

46. I think that Chavez won't want for investors.

What would be the incentive for OPEC to increase production if they're making fat profits by not increasing production?

I, for one, am rather happy to see gas prices going up for the largest consumers. Perhaps, it will stir some change in our system of plunder.

[anigbrowl]

55. Um, Venezuela's GDP growth is down 50% and FDI is falling too

Investors are in fact betting that he'll be gone after his term of office expires and holding back their investments until that happens. Investment in other Latin American countries with stable market economies is on the up and up, by contrast.

As for why OPEC might want to increase production, one reason is global stability, that is wishing to avoid resource or trade wars, and another reason is to control inflation and limit their exposure to dollar volatility.

[Hannah Bell]

69. Their 2008 growth is 8.3%. "down by half" only in comparison to one year

where it was 16%. Still sounds not too stagnant.

http://indexmundi.com/venezuela/gdp_real_growth_rate.html

[Cleita]

72. Hehe, You beat me to it. I was just going to post that. n/t

[Hannah Bell]

75. let's see if there's further comment from data-boy.

usually there isn't.

[anigbrowl]

79. Excuse me for spending half an hour doing something else, I'm sure. /nt

[Hannah Bell]

108. wasn't talking about your response time.

more about the fact you don't acknowledge the manipulation of fact to create the impression you want.

[anigbrowl]

78. Yes, and 2008 growth is projected to be 4 - 5.5%.

It's obviously falling, and so is FDI. I'm not saying that this is entirely the fault of Chavez, but nor do I agree that their outlook is all that rosy.

http://www.cattlenetwork.com/Content.asp?ContentID=225080

[Hannah Bell]

109. project, smoject. Latest data point = 8+%. I think the US last achieved that in...

maybe 1944 or something.

[mhatrw]

91. So why can't we nationalize the oil industry like Venezuela did before Chavez? n/t

[anigbrowl]

97. It might be possible, but there two things worth considering

1. nationalizing our oil resources is very different from nationalizing the industry. You could thus try to nationalize the deposits and refineries inside the US, but it would be very hard to expropriate the multinational oil companies themselves, which could simply move their head offices to Switzerland or someplace.

2. any attempts to do so 'overnight' or quickly would push the dollar strongly downward, and since we import a lot of our oil it would severely compromise our purchasing power, creating further currency pressure.

Please don't timagine I think everything is hunky-dory at present or anything; indeed, I expect the economic situation in the US to become a LOT worse in the next 6 months. Look at it this way, if a fairly healthy guy lets himself go and suffers a minor heart attack a few years later, a lifestyle change and medical treatment is advisable but not necessarily an immediate heart transplant. Nationalizing the oil industry might seem superficially attractive (like a new heart) but not be such a great idea when you look into the details.

[old mark]

13. Absolutely, YES,YES,YES!!!

ASAP; This should have been done decades ago, probably during WWII.


mark

[deaniac21]

16. We shouldn't stop there. All corporations need to be nationalized.

[Cleita]

19. Not all or we end up like Soviet Russia but the extraction industries should be

so that they can be regulated and operated in an environmentally safe way and for the benefit of the people who actually should claim ownership to anything that is taken from raw from the ground.

[deaniac21]

23. Farmers might not like that.

[Cleita]

29. I'm sure the big corporate farms that have taken over our farming industry

won't like it, but what if the government contracts family farmers to produce certain crops with help from the government so they don't have to starve?

[anigbrowl]

34. But this is effectively what already happens with subsidies.

OK, if the government owned the land it could order farmers to produce particular crops like soybeans or corn or whatever, rather than simply giving them a big incentive to do so by offering subsidies for those crops. But I'm unsure what you think the benefit would be. I am very skeptical about the ability of command economies to adapt to changing needs. In most countries were this is or has been tried, rationing is a regular occurrence.

[Cleita]

39. Why would the government have to own the land although they do own

a lot of land that they lease to ranchers and farmers? What the government needs to do is license the farmer or rancher to grow needed crops in an efficient but environmentally scientific way to get government help and approval on the safety and edibility of the crops produced. This would also prevent farmers from stopping growing food crops to start growing fuel crops exclusively like has been happening. You know the government has been regulating how farmers grow their crops for over a hundred year ensuring that we have a plentiful and safe supply of food. I'm just saying we don't need giant corporations doing it anymore.

[anigbrowl]

43. I thought that was what you meant when you said 'nationalize farms'.

Do you mean that you want to limit the size of any granted lease in order to exclude large corporations, or that you want to prevent leaseholders from contracting with corporations to manage the land?

I don't entirely agree on the food vs. fuel thing; that is, I agree that food should be a priority since biofuel is terribly inefficient at present, but I disagree in that much of the growing for things like ethanol is actually corn. So the most efficient way to halt that in the short term is stop giving ethanol fuel subsidies to corn producers.

I do share your dislike of large food conglomerates and their habit of establishing enormous vertical markets (where one company is involved in the sale of everything from fertilizer to farm equipment to unprocessed food to consumer products). This results in cartel and oligopoly behavior which is a bad thing economically. On the other hand, it's no trivial thing to say you don't like how the agricultural economy is shaping itself and just shaking it up in hopes of getting something better. One thing I can think of would be finding some way to price sustainable farming practices but that's quite hard to do. It's also a challenge from a political standpoint since rural voters tend to be conservative and don't necessarily vote in their long-term economic interest. This isn't just a Democrats vs. Republican thing either, the same mindset among farmers exists in the EU or Japan. Easy answers are in short supply.

[Cleita]

48. We definitely can't solve this in message board posts, but we really need

to stop thinking that corporations and businesses are the only way to do these things and government can't do anything. There are just some things government does better and some that business does better. I'm a strong believer that the people own what comes from the ground and we contract the government, who is us, to insure that they are used for the people and other species in a scientific, safe and environmental way and so that all the people and other species benefit from these gifts from the earth.

[JackRiddler]

45. Soviet Union is the only example in all history of nationalization, right?

It's not like most of the oil companies in the world are already national, right?

[Cleita]

49. Hey I'm on your side.

What I'm saying is the Soviet Union took over everything even manufacturing things that would be better left to business and the free market. The end result was a quality control disaster and no one could develop any ideas and form a little business of their own making things because they would find themselves in trouble with the law. So I'm not for nationalizing all industries just the extraction ones and ones that involve the commons.

[JackRiddler]

52. It's really a question of management models, not ownership per se.

A nationalized company doesn't have to be run in the incompetent, centralized, top-down fashion we usually associate with that.

There could even be a rational, ecological plan reached through a process of negotiation among all stakeholders and neutral expert bodies, and it could even be integrated into a plan for the whole economy.

We have planning now. Nothing would work without it. But it's in the hands of private corporations and remote bureaucratic entities that basically serve the interests of private capital.

[anigbrowl]

25. And what do you expect to achieve by that?

Experience suggests that this is the exact opposite of a winning formula. It is most certainly not going to bring about any sort of worker's paradise.

[tom_paine]

17. Not so long ago, I would have balked at this idea, but the Oil Industry are criminally complicit

with BushCo. Hell, they ARE BushCo.

While I do not believe in a command economy and still believe in FDR-style capitalism, I believe that the oil industry has become a criminal organization that, like the Mafia, is impossible to reform.

It must be broken, and it's criminal elements prosecuted.

[Cleita]

18. And while we are at it nationalize all extraction industries as well, that

means mining and lumber and any others that should belong to the people for the benefit of the people.

[Fountain79]

21. Wouldn't that be unconstitutional? n/t

[Cleita]

22. Do you have an article or amendment to the Constitution in mind that

it's contrary to?

[anigbrowl]

28. 5th amendment, most likely.

"No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation."

Mind you, that would limit the government's ability to expropriate (a fancy way to say 'take') the oil companies and their property. The government could, theoretically, simply buy them from the shareholders but the costs and complexities involved would be monstrous.

[Cleita]

30. Okay the private property mention. However, most of these

extractions are conducted on public lands with leases from the government and they pay far less that the lease is worth. That has to be fixed.

[anigbrowl]

35. That I could agree with. Perhaps royalties could be based on market values rather than a fixed sum

Certainly the current arrangement is not balancing the needs of all parties well. I think part of the problem is that in the past deals have been negotiated with the assumption of unlimited resources, or at least of limits being very far off.

[Cleita]

41. Oh dear royalties again. No we need the government to do this.

I grew up in a copper mine in Chile run by an American company that reaped all the profits and product for American use and none for the Chileans. That mine has been nationalized and the proceeds are now being used for the Chilean people as it should be. The mine is operating efficiently as well.

[anigbrowl]

53. Fair enough, but look at the history of Chile in between

They had a junta under Pinochet for a long time, and Chile still isn't exactly rich. Sometimes these policies make sense, but it depends on context. I even think communism may be quite a good temporary system for a underdeveloped country to get up to speed - BUT that doesn't mean that you can just apply the same elsewhere and expect it to work.

As an analogy, the horse and cart is a great way to move things around compared to people carrying individual bundles, so once you invent the wheel then it suddenly makes great economic sense to start yoking horses, and horses are still productively used as draft animals in some places. However, it would be a bad idea for the USA to forcibly reinforce horse transportation. Similarly, I'm not at all sure it's a good idea economically to simply nationalize resources here, even though that has been effective in some other contexts.

[Cleita]

54. Remember who brought them Pinochet, the

Nixon administration doing the bidding of the American corporate interests there. Also they have to fight classism as much as Chavez has to in Venezuela. These are entitled upper class people who don't believe the underclasses deserve to have anything and should be grateful to just be able to exist.

[anigbrowl]

56. Quite, I'm just saying that nationalization is no panacea for those issues.

Ans as you've probably guessed, I don't think Chavez is all that hot of a political model. He is way too authoritarian for my taste.

[Cleita]

57. He accepts the results of elections. That's hardly authoritarian.

Also, as one of the indigenous people of Venezuela he is fulfilling the role of the Big Man or Chief a model they understand and it's cultural. Yeah, I know the people of European extraction in both Venezuela and the USA don't get it but that's what it is.

[anigbrowl]

62. It's not an either/or proposition

Certainly, he knows when he's defeated and that there are times he has to back down, but in turn he makes proposals which would be highly authoritarian if implemented, like his recent suggestion of vastly expanded 'security' powers. On a scale of 1-10 I'd put him at about a 6, whereas I prefer to live in a society of between a 3 or 4. This is a purely personal opinion.

[Cleita]

68. Yeah, but his proposals are put to a vote and either passed or defeated.

Tell me when you got to vote on the Patriot Act or the removal of habeas corpus, or how the airport screens you for security, even the price you think you should pay for gas?

[anigbrowl]

81. So? That doesn't alter my opinion of his leadership, or that I endorse Bush's leadership whatsoever.

Bush is too authoritarian for my tastes as well. I have my opinion of Chavez, you have yours. I am obviously not as impressed with his socialist approach as you are and I've said why. You don't have to agree with it.

[Occulus]

36. But oil companies aren't people.

I smell a challenge to the doctrine of corporate personhood in the air....

[Cleita]

37. I agree. n/t

[anigbrowl]

47. Their shareholders are. Even institutional shareholders...

such as pension funds etc., are operating on behalf of people. So if you limited corporate personhood (possible, but very tricky because you'd have to completely reorganize contract law), you'd just be dealing with a massive class action against the government instead. While I agree that the system is not working well as it stands and needs to be re-oriented around a goal of long-term economic interest rather than short-term gain, magic bullet solutions rarely turn out all that well.

[newmajority]

26. Lock these criminal bastards up and charge them with treason.

And if they're found guilty, show the "penalty phase" on the 6:00 news.

[Carnea]

27. Nationalizing Oil Companies will mean you tax dollars support H2 owners fill-ups.

The oil companies will operate at a loss some Americans don't have to conserve gas. Gasoline is .24 cents a gallon in Venezuela. Do you really think it is in America's long term interest to have gasoline under a dollar paid through are taxes????

How any progressive could support this boggles my mind.

[Cleita]

32. 24 cents a gallon? I think most Americans would support that.

Also, the Americans won't conserve argument is so right wing.

[Carnea]

38. So people in New York City should pay taxes to fill up f150's in Alabama...

I don't think about conserving water. I mean the bill is the same no matter how much laundry I do or how long my showers are. It's not right wing it's human nature. You want to conserve water charge based on actual usage not a flat rate.

[Cleita]

42. Really and why is the bill the same? Could it be government subsidies?

My water is free from a well, but believe me I can only wash and water so much. The only way I can waste water is to have a leak in in the pump or pipes that distributes the water and believe me when that happens it gets repaired very quickly. Also, we are very aware of what to plant to keep water usage down. So no I don't think there will be waste. That is such an unfounded argument that Republicans like to throw out, like the welfare queen argument. People will waste wantonly if you give them too much. BS.

[Carnea]

44. Your making no sense to me. You can waste water by having

a fucking swimming pool. You can waste gas buy buying a big SUV instead of a small car. Do you really want to go back to only the extreme poor and convicted drunks using the bus system?

Should the inner city folk subsidize my lifestyle?

What is right wing about wanting to conserve energy???????? :banghead: :banghead: :banghead:

[Cleita]

51. Well, you know who wastes the most water and gas? It's the same people who

are making the most money from it by overcharging you for it in their swimming pools and forget SUVs. How about private jets? They aren't suffering one iota from high prices because they can afford it. In the meantime, you get to pay through the nose. And as far as going back to extreme poor it's happening today because of those corporate asses eliminating the middle class.

[anigbrowl]

59. I have to disagree here

People unfortunately will waste wantonly given the opportunity. I am constantly mystified at my neighbors watering their tiny lawns with a hose and letting the water run down the street when they could do an equally good job for the minor extra effort of holding a watering can. Ditto with people hosing their cars because they don't want to get out a sponge and a bucket. Gas is still cheap enough that people prefer to use one of those annoying leaf-blower things than pay someone to wield a rake. And lots of people still litter, effectively wasting public space by dropping their trash in it.

This happens on an industrial level too. Nixon set up the EPA partly because in the early 70s so many factories etc. dumped their waste in the Chicago river that it had turned into a giant sewer. The 'tragedy of the commons' and 'moral hazard' are not Republican inventions, although the Republicans frequently exaggerate them in one area for political purposes while ignoring or concealing them in others. Contract abuse by Halliburton/KBR in Iraq is an outstanding example.

Meantime, if you have big fuel price differentials (say between NY and Alabama) and just rely on people's good will, you will get fuel smuggling. I don't know what percentage of people lean this way, but a large portion of the population will make a buck illegally if it's relatively safe to do so. It's just human nature; look at the popularity of pirate movies. Many people would secretly like to be a pirate if they could. Various readings incline me to the idea that about 10-15% of people are freeloaders.

Over in Europe farm and fishing diesel is untaxed (effectively a subsidy), but they have to put red dye in it to stop farmers etc. from buying more than they need and then selling it back to truckers or owners of deisel cars for a quick profit at the government's expense.

[Cleita]

66. But don't you see it's always Joe Sixpack's fault and the real

wasters are the ones who can well afford even expensive prices. Honestly, that water goes down the drain, evaporates and comes down as rain again. It's not that big of a deal. In times of drought, yes water has to be managed but that applies to everyone, even the very wasteful ones. I have had notices to use so much less water in the past by the utility company when I had one and they give you a meter reading you can't go over without getting fined. But guess who doesn't mind getting fined and will use as much water as they want anyway? So you can see these are calloused ploys to raise prices for profit and nothing else. So see Europe has figured out a way to keep people from abusing the system, red dye, but they don't have to penalize all farmers by taxing them because they would just waste it or sell it anyway.

[anigbrowl]

86. Actually I feel waste is more evenly spread through the system

Well-off people spend proportionally less of their income on necessities so they may consider fines etc. an acceptable overhead and treat regulations as an excuse to waste to their hearts' content. However, a lot of less well off people may waste to some degree, but the effect is magnified by their larger numbers.

I am not pointing fault at one camp or another, just saying that people in general tend to act in their short term interest more than their long term interest in many cases. Economists call this 'discounting the future', in other words placing a lower value on expected future availability vs. current availability.

Making such an observation doesn't mean that I endorse how things are and think all problems are the fault of Joe Sixpack or something. On the other hand I don't think that all economic problems can be laid at the feet of the well-off either.

[A HERETIC I AM]

77. Off-Road Diesel is dyed red in the USA also, and for the same reasons you cite. n/t

[anigbrowl]

82. Thanks. I don't drive here so I've never looked into it. /nt

[JackRiddler]

58. Huh?

That's definitely not the idea!

And it wouldn't affect the price. The only price you could change would be for domestic reserves, such as they are.*

The point would be to invest the profits differently. I'd support a higher gas tax, if the money were going into alternative energy development - starting with the biggest sources of all, efficiency and transportation restructuring.

People who need to drive to live and can't afford it should be helped, but otherwise Americans are in the present bind in part because they've had artificially cheap gas for so long, and it's allowed continued reliance on oil and killed the development of alternatives. In Europe, they've been paying prices like this all along, and it's spurred alternatives, especially efficiency. It's time that oil had a price that reflected the need to develop alternatives and its actual cost to the environment and to the future.

(* - Oh, I guess you could try conquering the oil fields in various countries. That would allow you to price their output. Hmmmmm....)

[Carnea]

70. I'm sure congress would compete with each other who can lower the price of Gasoline faster.

Just look at the pandering with "tax holidays". Congress would never let the price get high enough to promote the pain needed for conservation.

[Cleita]

71. Apparently, not this Congress, but

maybe we will get a Congress one of these days that truly represents the people not the special interest lobbyists who got them in power.

[aint_no_life_nowhere]

61. I say use the taxing power to regulate their behavior

Impose heavy taxes on their profits which can be offset by investing that taxable money into opening new leaseholds to drilling and new refineries. And also a certain amount should be dedicated to funding alternative energy. Don't bankrupt them, but give them a big incentive to act more in the public interest, or else. It's a complex problem and it requires complex solutions.

[anigbrowl]

63. Seconded.

[Bluerthanblue]

64. quickest way to get more healthy alternatives- and technology

is to take away the opportunity for mega greed - OIL.

peace~

[emad]

65. Nationalization = bonkers.

As a net importer of oil the USA needs to get a reality check after years and years of gas guzzling profligacy.

$4 a gallon?

Peanuts.

UK pays $10, EU around $8.50, etc.

America's addiction to driving and expecting cut price gas is tantamount to a national delusional psychosis.


Nationalization tantamount to Stalinist state economy claptrap.

[JackRiddler]

90. Interesting examples - EU has state-owned companies in this sector...

and others, and they do very well with it. Or are they Stalinist over there in Old Europe?

[anigbrowl]

101. I'd say they're about 50/50

Their market is half-open, but there's definitely domination from big firms like Germany's E.On and France's EDF. Also there are strong ties between Total and the French government. Without going into detail, France isn't always a completely upstanding global citizen either. The EU energy market is really quite complex and there's a mix of good and bad resulting from that.

The EU countries do set aside ethical considerations when it suits them (for example, look into the relationship between EU energy demand, Russian Gas production, and the central Asian republics). And consumers as well as businesses in the EU find plenty to be pissed off about too. So it's very much a mixed bag...there are things we can learn from the EU but that don't fool yourself that they're angels. They operate out of necessity as much as we do, and all players in the global energy market engage in their own forms of hardball.

[JackRiddler]

105. I couldn't for a moment fool myself into seeing the EU as angels...

I lived there for 15 years and have no such illusions.

But the interests of their own citizens are not almost completely irrelevant to the PTB there, as is the case with the US government and corporations in relation to US citizens. And based on regional arrangement you will admit the dubious dealings with Russia make more sense than the US propping up a bunch of oil kingdoms, or invading Iraq.

[Swamp Rat]

67. Nationalize the Oil Companies 100%, and seize all the personal assets of the owners and CEOs

Then sentence them to clean up Iraq, along with KBR, Halliburton, Blackwater (weaponless), et al.

[Cleita]

73. Now you are talking

It's time we got back the money they have stolen from us.

[Swamp Rat]

74. They are all thieves, and therefore have NO property rights.

They deserve life sentences at hard labor rebuilding Iraq for all the death and destruction they have caused.

The defense of the petrol industry on this thread, other threads, and other message boards brings to mind Stockholm Syndrome.

[Thothmes]

102. The money was not stolen.

It was appropriated to them by the House of Representatives and the Senate of the United states

[Cleita]

110. Who stole it from the US Treasury for them in an unacceptable

way with no bid contracts for starters.

[Thothmes]

114. Again our congress allows no bid contracts

Every administration since LBJs as used no bid contracts in some circumstances. The law allows it.

[Cleita]

115. Well, I don't think it changes the fact that they have used taxpayer's

money to make themselves rich and I don't know when they fixed the law to do that, but it used to be that government contracts had to be bid on and the only time a company might get a contract without being bid against was because no one else did bid against it. Now they aren't putting them up for bid but handing them out like candy to their cohorts. This is corruption of the worst level. I don't think even Italy under Mussolini was that corrupt.

[Thothmes]

117. The other exception to bid contracting

is when the contracting agency does not believe that there is sufficient time to go through the bid process. A lot of the no-bids recently have been of this type. Another example is that Haliburton was awarded a no-bid contract in 98/99 for Nato support operations in Bosnia by the DOD.

[TBF]

83. Hell yes but Obama better give a warning so I can go on vacation first -

because I do think Houston will explode if this happens.

:hide:

[bridgit]

84. Nationalize!

[Dover]

85. Nationalize water and utilities, energy and perhaps some aspects of food.

We've seen what the alternative is...so time to take them back. And time to reign in multinationals with stronger global institutions as well as a reworking of our own financial institutions.

[mhatrw]

87. Natonalize the entire defense and health industries as well. n/t

[JackRiddler]

118. While you're at it, break up (create free market) the media!

[anigbrowl]

89. I wish some of the 'Nationalize!' folks would offer some details of how they expect this to work

It's really easy to say 'they're criminals, screw 'em! Up the people!', but how would you go about implementing this? What would you do to prevent a collapse in the value of the dollar? Would you compensate pension and other investment funds which hold around 50% of the energy industry? If you nationalize those too, where would you draw the line between ethical and unethical investments?

Pointing out the legal and economic complexities of such a major change doesn't equate a loyal defense of oil/gas companies, but is just an acknowledgment that the industry and its place in the economy is quite complex. Being from Europe, which is more socialist than the US, and having visited places like the USSR, which was a good deal more socialist again, I think the US has something to learn from their economies but that socialist approaches have their own weaknesses, as do many revolutionary impulses. I don't believe in a one-size-fits-all approach, and nor do I think that simply nationalizing an industry eliminates economic problems.

In ways, this thread reminds me of discussions with conservatives about invading Iraq or drilling for oil. They too are under the impression that making a quick and bold change will bring about a permanent improvement. Of course they were quite wrong about this with regard to invading Iraq and are mostly wrong about it with regard to new drilling as well. But I don't see how you win the argument by proposing opposite but equally shallow proposals.

If you're going to propose such a major change I think it's reasonable to accompany it with some explanation of how you intend to go about it and how you expect to deal with the challenges involved. Just pushing the idea without thinking it through at all isn't going to get results.

[JackRiddler]

92. Good points

This isn't the place for a policy paper, but the questions in your first paragraph are relevant.

Did you read the OP, about the Exxon shareholder vote?

That's my point: How to achieve the necessary conversion of the energy and transport economy -- a problem that can't be "simplified" enough, by the way, it's dire, radical, and related to everything else -- how do you do that, I say, when the oil companies and their shareholders stand in the way because of their private interest? They make money off the way things are, so they can throw around their weight to keep things that way, and in the end species and civilization must go off a cliff. Exxon won't even say they'll invest a billion out of 40 in alternatives. It's crazy.

[anigbrowl]

98. Yes, and I thought your OP was thoughtful and considered multiple points of view

I strongly agree that we need a major change of direction, and that although nationalization is kind of an economic 'nuclear option' it's one that should be kept on the table to remind the oil majors that they have a lot to lose as well. I would hate for it to go so far because it might be just as dangerous as a war with Iran, and we would just end up jumping off a different cliff.

So I'm not against people advocating the idea, I just think they ought to include suggestions about how to do it before getting all enthusiastic about the prospect.

[Dover]

95. I think nationalizing is only a step, not an end. It's important to get control

of the resources because it's clear that the multinationals are not willing to regulate themselves, nor is there an institutional/financial incentive to do it. Our current system no longer reflects our values. Private ownership by the few is clearly not the solution (whether that owner is a multinational corp or a government). We need to develop a hybrid based on new values that go beyond the monetary ends or class. I don't know what that ultimate plan is, and it is certainly a topic that we as a nation need to discuss openly. But I think the key will be some hybrid that balances sovereignty with global consciousness and responsibility. To recognize the individual within the context of it's unique relationship with the whole. Sustainability.

Our new world and government will follow rather than shape our evolving values.

[anigbrowl]

100. This I totally agree with

It's clearly an urgent priority. I just think that we should avoid following the Republican party down the road of offering simple solutions to complex problems. If you look at Gore's 'Inconvenient Truth' film, one of the best things about it is that he doesn't reduce it down to finger pointing or say we can fix the problem with one dramatic change.

A big reason I like Obama is because he's willing to look at a complex topic and say 'this is complex and we need to think about it more than we have in the past,' even though many peoples' first reactions to his proposals is superficial and angry. For example, I agree with him about pursuing bin Laden and that we might have to alter our relationship with Pakistan. But of course when he first said that, a lot of people responded 'ZOMG Obama wants to bomb/invade Pakistan'. I admired him a lot for sticking to his point and waiting for people to wrap their heads around it, that took political courage.

So to wind up (because I really need to switch to working on something I've neglected today), if we're going to look at nationalizing oil or even part of the oil industry, we need to think hard first about what we want to achieve and how we're going to do it, or we end up just being like bush in reverse and swapping Republican disasters for Democratic disasters.

[JackRiddler]

111. Thank you.

[galledgoblin]

93. how would dropping the price of oil

encourage switching to alternative cleaner and renewable sources?

nationalizing would be crazy, but I fully support the windfall tax idea.

[JackRiddler]

107. Why does nationalization mean dropping the price?

At most the US could only drop the price on US oil, right? Oh yeah, or try to do so with Iraqi oil.

[galledgoblin]

112. seems like that's the main reason for support in this thread

12 cent/gallon oil! hoo-rah!!

even Marx can't eliminate the oil peak.

[JackRiddler]

113. Could be. Interesting. It's not what I meant. Wonder if certain people read my OP.

[T.Ruth2power]

116. K&R

Choice #1 quite naturally