Time to Nationalize our Oil Companies?

[ErikJ]

good article yesterday on a trader website by a trader of some sort. Some of best excerpts.

Don't Tax Oil Companies - Nationalize Them!
Thursday May 19, 2011 - 09:36 AM EDT Trading Goddess
............
The average cost of producing 1 barrel of oil was $11 (THAT IS ELEVEN, NOT A TYPO!); the average price of the oil in the marketplace–$92– some 8.5 times the cost of getting the oil out of the ground.


That is (and I cannot emphasize this point enough) 8.4 Million barrels LESS oil PER WEEK (11.3%) being imported than this time last year, WHEN OIL WAS $67.15.
.............



Clearly the current situation does not lead to oil companies developing safer, cleaner, renewable means of energy - they've had 100 years to do it and we're still using oil. In fact, their massive profits lead them to undermine those developments when they occur and to lobby against sensible measures like conservation or pollution controls. The oil scam is just too damned profitable and the money is too corrupting so, if the American people want to stop losing this game day in and day out - WE HAVE TO END THE GAME!

http://markets.financialcontent.com/pennwell.ogj/news/read?GUID=18502540

[LetTimmySmoke]

1. I got a better idea.

Time to move beyond oil.

[ErikJ]

3. It will never happen as long as oil is privatized.

[Drale]

2. The republicans would never ever let that happen

in fact it might push them to show their true colors and actually use violence.

[ErikJ]

7. Blood for oil?

Maybe they would turn the army on us coup de tat style.
That's why she says in the article that all the other businesses should get together lobbyists for nationalizing oil. Because Big Oil is sucking out all the disposable income from their customers. Bad for business in other words.

[abelenkpe]

4. Works for me. nt

[Canuckistanian]

5. It could wipe out the national debt

Never mind the deficit. That would be taken care of immediately.

[SDuderstadt]

13. Total bullshit...

since the "takings clause" of the 5th amendment would require us to pay "just compensation".

The constitutional illiteracy of DU is simply stunning much of the time

[Canuckistanian]

15. Well, excuse me

I'm not even from your wretched country.

Shouldn't you be trying to making it better instead of trashing anonymous posters from God-knows-where?

[ErikJ]

18. We subsidize the Big Oil so much

just compensation would be probably nothing. Or even less. Our mideast military occupation they say is equivalent to $8 a GALLON of gas.

[Arctic Dave]

19. Easy. Most oil deposits are on State or Federal land,

have the US create it's own production corporation and manage the extraction. Just like the oil corporations do it now. Pretty much the entire industry is specialised and is not owned at all by the actual oil corporation. As for the employess, the would just "change hats".

[SDuderstadt]

21. This "debate" just keeps getting more and more...

absurd and you guys are grasping at straws. This is deeply comical.

[Arctic Dave]

25. What is comical?

You asked the question and I answered it. I have worked eighteen years for oil corporations and have pretty good idea of how they operate. Oil corporations have become pretty much contract managers. They own almost nothing and contract out almost all aspects of their operations from initial seismic work, to drilling and facility design, construction and operation.

It seems ironic that the destruction of the working class by "division of labor" could be the downfall of some corporations.

[ErikJ]

26. +1 Sounds like the Health Insurance companies

Just vampire middle men sucking out the profit.

[SDuderstadt]

31. Dude...

read the Constitution and quit grasping at straws.

[joshcryer]

38. The constitution isn't relevant to the claim about leased land.

BLM land is public, and the mineral rights leases do come with clauses like "don't fuck up shit" and "give the public some percentage of the shares." It's public land.

[SDuderstadt]

40. So, what?

Does the federal government have any drilling or oilfield equipment? Any infrastructure? How much do you think all that stuff costs?

This is a monumentally stupid and totally impractical idea.

[Arctic Dave]

42. Dude, read the Constitution, have it on my iPhone.

Tell me what I outlined is unconstitutional? How is developing a nations resources by itself instead of selling drilling rights to someone do it instead with a massive mark up against the laws.

With my outline you do not commendeer anyone's property so you don't have to compensate anyone.

[SDuderstadt]

44. Dude....

with what equipment????

[Arctic Dave]

48. You really don't know anything about oil production do you?

What part of Oil companies do not own the equipment, they contract. Siesmic work, PGS. Drilling, Nabors. Engineering, Bechtel. Pipeline construction, Price.

Notice how none of them are owned by BP, Conocophillips, ExxonMobile.

[SDuderstadt]

54. Cool...

layout a detailed and workable plan.

Love to see it.

[Arctic Dave]

55. I' ve been working on it for about three months,

maybe Alaska will be a leader with this.

[joshcryer]

37. No, that's a legitimate claim, the US *does* take shares from leased land.

It's just an absurdly small amount, I think it's around 5% but I'm too lazy to look up BLM.

[TTUBatfan2008]

70. Standard Federal Royalty is 12.5%...

Standard royalty by a landowner is 25%. 12.5% was the standard 40 years ago and the government hasn't adapted with the times.

[joshcryer]

36. The US could raise the share it takes of leased land, I think it's around 5%.

If we raised it to 90% you have an argument, but most of it is either deep offshore (which is not allowed for the most part) and oil shale (which is dubious at best, the in-situ methods do work but the oil companies are sitting on their leases for when it is super profitable in about 25 years).

[slay]

57. Keep clinging to that idea as shit keeps getting worse and worse - will be interesting to see when

you admit you were wrong. Sure legal shit would have to be done - but it's not total bullshit - we should do it.

[SDuderstadt]

58. I'd love to see your...

detailed plan, dude.

"Sure legal shit would have to be done" is not a detailed plan.

[slay]

59. Well DUDE, that's like, you know, not my problem. The OP asked, and I said HELL YES

and i stand by that. i'll leave it to the money freaks and legal assholes to work out the details - not my job.

[SDuderstadt]

60. Of course...

someone else will do it.

In other words, there is no detailed plan.

[SDuderstadt]

6. Jesus...

here we go again.

Can you describe some way to do this that is even remotely constitutional?

[ErikJ]

9. Most oil producing countrys' oil is nationalized

Mexico, Brazil, Norway, Venezuela, Saudi Arabia, Russia etc etc. Are we not "men"?

[SDuderstadt]

11. Describe how you would do it...

under the United States Constitution. Square it with "takings clause" of the 5th amendment.

[ErikJ]

14. Buy them off

The last phrase of the Fifth Amendment to the U.S. Constitution, known as the takings clause, reads: “nor shall private property be taken for public use, without just compensation.”

So justly compensate them then. Cities buy private utilities all the time. No different. They are vampires keeping us addicted to oil. Buy them off.

[SDuderstadt]

20. This "debate" just keeps getting more and more absurd...

take a look at the balance sheet of any of the oil companies and tell me where we will get the money to provide "just compensation". To be blunt, you're just making shit up.

[ErikJ]

24. Dont you think that

since we paid dearly to "secure" Iraq for AMerican Big Oil companies that we should get a cut of the action as well? In fact I bet it would probably work out to 100% of the action if you put a pen and paper to it.

[SDuderstadt]

30. Dude...

read the fucking constitution and quit grasping at straws.

[ErikJ]

51. I thought we already settled that. Just compensation remember?

So you think we dont deserve ANYTHING from the big oil majors as payback for getting them their Iraq oil fields?

[SDuderstadt]

52. Dude...

This thread is an embarrassment to DU.

[Hugabear]

61. Dude, seriously...

[joshcryer]

34. Ahh, I see you realize this now. So what's the plan?

Nationalize Canada's oil? The US is not a major producer.

You could nationalize, maybe, refining, but it would not change the going market rate for oil.

[ErikJ]

49. Use the $ billions for -paying down the debt

subsidizing renewable energy R & D. Use your imagination!

[Scuba]

10. Why not? It's our oil (and coal, and copper and taconite, etc). n/t

[SDuderstadt]

12. Read the fucking Constitution...

dude.

Specifically, the "takings clause" of the 5th amendment.

I swear the constitutional illiteracy of DU is simply stunning.

[Fumesucker]

72. Property is confiscated all the time..

Travel with more than a few twenties in your wallet and get stopped and you stand a chance of having it confiscated by the cops.

Then you have to sue to get it back.

[dkf]

8. But isn't a lot of their drilling outside the US?

Wouldn't that be like seizing another country's oil fields? Or would that invalidate our oil companies contracts with those other countries?

[Chris_Texas]

16. No

[JanMichael]

17. The time was decades ago. nt.

[Spider Jerusalem]

22. The US imports more than half the oil it consumes.

Which is why anyone who suggests nationalising oil companies as a way to lower oil prices is an economic ignoramus. Any oil-producing country which has a nationalised oil industry and low fuel prices as a result is a net exporter, not a net importer (Saudi Arabia, Venezuela, etc).

[ErikJ]

23. Doesnt make any difference

Use the proceeds from the nationalized oil to buy imported oil. But use most of the proceeds to subsidize renewable energy research and development.

[tammywammy]

28. +1 n/t

[Nye Bevan]

27. DU really does have some mind-bogglingly stupid economics threads.

1. The shareholders would need to be paid compensation, which would cost billions (if not trillions) to make them whole, as the Government cannot simply "take" private property without compensation.

2. The senior executives would have their golden parachutes and gold-plated pensions triggered by the change of control. So they would get millions in extra compensation.

3. The Government does not have the expertise to run oil companies, so it would need to re-hire these senior executives at premium compensation packages to effectively run their old companies (they would still keep their golden parachutes and gold plated pensions).

4. So we would effectively end up with the same people working in the oil sector, except that there would be an extra layer of bureaucracy and huge amounts of taxpayers money would have been spent, adding to the national debt.

It's legitimate to argue for higher taxation of oil companies. But it's ridiculous to argue for nationalization.

[ErikJ]

29. We spend about a billion a DAY on imported oil

alone. So where's the problem? Cut the middle men out like we are going to do with the health insurance companies someday.

We bust up the big oligopolies into 30 or so companies like we really should. Then we buy a few of them out and slowly "starve" out the rest.

[SDuderstadt]

32. Here's what you're looking for:

[ErikJ]

43. This?

"Clearly the current situation does not lead to oil companies developing safer, cleaner, renewable means of energy - they've had 100 years to do it and we're still using oil. In fact, their massive profits lead them to undermine those developments when they occur and to lobby against sensible measures like conservation or pollution controls. The oil scam is just too damned profitable and the money is too corrupting so, if the American people want to stop losing this game day in and day out - WE HAVE TO END THE GAME!"

[SDuderstadt]

45. Nevermind, dude...

This is, without a doubt, one of the most poorly thought through OP's I have ever encountered.

[joshcryer]

33. The vast majorty of oil producers are already nationalized. Canada and the US are the two...

...major exceptions.

[ErikJ]

39. ..the 2 suckers

We treat our oligarchs like Kings. They pump OUR oil out for $11 a barrel and sell it back to us for $100. What kind of shit is that? Especially when we pay trillions to secure their overseas oil fields.

[Jack Sprat]

35. Don't stop the dreams short

Nationalize the oil and energy firms first and foremost.

Nationalize healthcare and have a single government provider for all without the costly red tape.

Nationalize the churches and make certain they are regulated in such a way that they come nowhere near the affairs of state.

Nationalize firms picked to build high speed rail service and infrastructure improvement coast to coast. Plenty of jobs there.

Take over the banking and Wall St for awhile too until we can see if it could honestly regulated.

[ErikJ]

41. Applause. State owned banks probably better.

And nationalize the Fed too! Right now its owned by 12 big private banks.

[Octafish]

46. It's a great idea.

Good for the country. Too bad for Big Oil boys.

[SDuderstadt]

47. Jesus, dude...

tell me. How much oil-drilling and oil production equipment does the United States own??? How about refining? Distribution? Transportation?

This is why it's difficult to take you seriously.

[Name removed]

50. Deleted message

Sub-thread removed by moderator. Click here to review the message board rules.

[ErikJ]

53. We could lease /contract out as easily

as any of the Big 6 does. They contract out almost everything.

[Octafish]

62. You're big into property, sduderstadt?

Do you wonder why people never take you seriously? Dude.

[slay]

56. Hell yes.

nationalize all forms of energy, and health care. socialism is the ONLY sustainable future imo.

*on edit: upon reading some of the um - comments - in this thread - i see we will have to have a total economic collapse before this is possible. people all talking shit worrying about stockholders getting paid - whatever. humanity has a LONG way to go in understanding that capitalism has brought us to where we are now - on our fucking knees as a country - and shit's only going to get worse. some of these responses though - wow - i did not realize so many people bought into capitalistic bullshit here on DU.

[socialist_n_TN]

63. RE: Your edit......

Don't despair! :) There's just a few posters here that buy the capitalist bullshit hook, line, and sinker. But they DO show up in every thread about the subject. There are more that are, I would say, "uncertain" about capitalism, especially in it's present form, but still say they support the system.

But there's a SOLID contingent, maybe even a majority, of anticapitalists here. I've been posting a little over a year and I remember the first poll I saw which asked about socialism. The numbers, as I recall, of supporters of socialism were somewhere in the 40% range. I thought it was GREAT. The LAST poll I saw on the subject, the "socialist" answer was up around 60%. In just a year.

Hell, DU even knows enough about Leon Trotsky now to have arguments about Trotskyism! I'm impressed.

But as I say, the usual apologists show up in every thread about the subject. You will notice that it's always the same names.

[Nye Bevan]

68. You make some excellent points.

I naively believed that the Constitution stated that the Government cannot seize private property without paying compensation.

But having read your post, I understand now that that's merely "talking shit worrying about stockholders getting paid". Obviously the Constitution does not apply when we are talking about seizing oil companies.

Thanks for enlightening me.

[ohnoyoudidnt]

69. Would we really have to buy them out?

Could the US just stop giving or renewing their leases and contract out the work on their own? Or did the government already give them long term contracts to drill in most areas?

[badtoworse]

64. I'm not interested in nationalized oil companies in the USA.

I have zero confidence that a government run oil company would lower the price or increase the supply of domestically produced oil. I believe the government would make a complete cockup of it and gasoline would be even more expensive.

[socialist_n_TN]

65. So let me get this straight........

You have zero confidence that a democratic run oil company would lower the price or increase the supply of domestically produced oil. You believe the democracy would make a complete cockup of it and gasoline would be even more expensive.

Is that right? I wonder what Venezuela's domestic gasoline price is.

[badtoworse]

66. Venezuela is an exporter of petroleum. That makes a huge difference.

[socialist_n_TN]

67. But I thought we could DRILL our way out of our

energy problem with the assistance of the "Invisible Hand of the Market". Is that wrong? Don't we just have to pray to the "Invisible Hand" and everything is forgiven and oil gushes from the ground in every yard?

[badtoworse]

71. How would you know? For decades, large areas of the country have been off limits to exploration

Alaska, the Atlantic Coast and Florida are potential oil producing areas, but the government won't allow exploration in those areas. Do you think Pedevesa has to put up with that? I don't think so. Is that the mentality you want running a national oil company? I sure don't - I'd rather have an oil company that is serious about producing petroleum. Our government is clearly not serious about increasing domestic production and that is only way a national oil company could potentially lower the price.

Even if domestic oil production were nationalized, what makes you think the oil wouldn't be sold at the world price and the profits used for some other purpose? I doubt that a nationalized oil company would be as efficient as a privately owned one so production costs would likely be higher and cost savings less.

There isn't much the government does efficiently. I don't like $4 gas, but I'd rather pay that price and have gas available when I want it than rely the government for it.

[NYC Liberal]

73. This whole thread is...astounding, to say the least. nt