Nationalizing the Oil Industry
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Nationalizing the Oil Industry
Not sure I see a downside to this. Why isn't it being discussed as a viable option? It seems to be the fastest way to reduce inflation.
Biden Wrote a Stern Letter to Oil Refiners. His Government Should Take Over the Industry Instead.
Biden Wrote a Stern Letter to Oil Refiners. His Government Should Take Over the Industry Instead.
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Re: Nationalizing the Oil Industry
There is absolutely nothing preventing the government or any of the wealthy donors to elections from building a new refinery, other than the government and wealthy donors who block infrastructure development.
There is a lot of obvious downside to having refineries taken over by the government. While the downsides may vary depending on government control by a particular party, there are still downsides. I would never advocate having another incestuous relationship with the government and energy like we had with the former Secretary of Defense, a former president, a president and and vice president. The acquisition of Dresser by Halliburton was one of the most ridiculous purchases ever made. It was insane. It was insane the day it was announced and got dumber with every hour and page of due diligence. It was an early and obvious indication that fiscal factors may not be a priority when pride and larger control issues are at stake. At the time that deal and others were going through, the Clinton/Trent Lott administration was dismantling Glass Steagall and allowing mergers like Exxon and Mobil. The democrats and republicans could not have been more in cahoots with Wall Street and energy (upstream, downstream, oilfield services).
The ties to energy, including oilfield services and other contracting under the guise or umbrella of oilfield services, during the Gulf War was devastating. Whether you see these ties as selfish aggression, murder, conspiracy or merely a credibility conflict, there is no question that the price of using the government machine to impact the commodity prices and the energy industry was paid with American dollars and the blood of many people from many nations.
A government takeover, such as the cancellation of infrastructure projects, effects inflation. If we are willing to hand over the refining industry because we don't like the consequences of what our government is doing, why stop there? Why not socialize/communize pillows and cheese too?
There is a lot of obvious downside to having refineries taken over by the government. While the downsides may vary depending on government control by a particular party, there are still downsides. I would never advocate having another incestuous relationship with the government and energy like we had with the former Secretary of Defense, a former president, a president and and vice president. The acquisition of Dresser by Halliburton was one of the most ridiculous purchases ever made. It was insane. It was insane the day it was announced and got dumber with every hour and page of due diligence. It was an early and obvious indication that fiscal factors may not be a priority when pride and larger control issues are at stake. At the time that deal and others were going through, the Clinton/Trent Lott administration was dismantling Glass Steagall and allowing mergers like Exxon and Mobil. The democrats and republicans could not have been more in cahoots with Wall Street and energy (upstream, downstream, oilfield services).
The ties to energy, including oilfield services and other contracting under the guise or umbrella of oilfield services, during the Gulf War was devastating. Whether you see these ties as selfish aggression, murder, conspiracy or merely a credibility conflict, there is no question that the price of using the government machine to impact the commodity prices and the energy industry was paid with American dollars and the blood of many people from many nations.
A government takeover, such as the cancellation of infrastructure projects, effects inflation. If we are willing to hand over the refining industry because we don't like the consequences of what our government is doing, why stop there? Why not socialize/communize pillows and cheese too?
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Re: Nationalizing the Oil Industry
A new refinery wouldn't need to be built and "blocking infrastructure" has nothing to do with our current situation. Just buy a controlling interest in what's already there and make production decisions based on the needs of the American people instead of the greedy desires of the shareholders. It really is that simple, but it won't happen because Democrats are pussies. They're more afraid of being called Socialists than anything else.
Not that I can see. Our current gas price predicament is a result of our adoration for unbridled capitalism. And it has failed us at a crucial time when Americans are hurting. The oil exists as a natural resource of the United States and should belong to the American people. The only reason private businesses are allowed to profit from it is because we let it happen. It should be nationalized for the same reasons healthcare should be nationalized. Government isn't interested in turning a profit, it is only interested in doing what's in the best interests of the American people. And if gas prices are really such a trigger for voters, then what do you think they're going to be complaining about when they're paying $0.20 to $0.50 cents per gallon at the pump like Iran and Venezuela?There is a lot of obvious downside to having refineries taken over by the government.
Such as?While the downsides may vary depending on government control by a particular party, there are still downsides.
It will dramatically reduce inflation because the price of energy is no longer set by OPEC or the global market. And "cancellation of infrastructure projects" has nothing to do with this.A government takeover, such as the cancellation of infrastructure projects, effects inflation.
Pay attention. It isn't what Government is doing, it is what private oil companies are doing. They're reducing production at the behest of their shareholders who want more profit. More production means lower margins because prices then will go down. Why pay to have 10 cows milked for $1/gallon when you can just milk two cows and charge $5/gallon? Same revenue with greater margins.If we are willing to hand over the refining industry because we don't like the consequences of what our government is doing
So again, what's the worse that can happen? Much cheaper gas is all but a guarantee because voters seem to care more about gas prices than anything else, so why wouldn't the party in power want to reduce prices to make them happy?
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Re: Nationalizing the Oil Industry
Despite the headline, the article doesn’t propose nationalization of anything. The Constitution prevents nationalization by requiring just compensation when the government uses its powers of eminent domain.
What the article proposes is that government purchase shuttered refineries and operate them to avoid sharp price shocks like the US is experiencing with refined petroleum products. The refining industry is acting just like we should expect rational actors to act in a free market system. The industry is used to investing capital in refineries based on the rate of return over the useful life of the investment. The transition away from fossil fuels effectively shortens the useful life of new capital investment. Rational market actors respond by requiring a higher rate of return - increased profits.
The Government doesn’t have to turn a profit. So, it can restart shuttered refineries to smooth out price shocks caused by refineries closures that anticipate the future reduced demand but don’t account for the short-term capacity need to avoid spikes in prices.
There are potential downsides to this proposal. One is that it may cause refinery owners to close plants even sooner in order to cash out on the government’s dime. So, the government could be forced to purchase much more than it really needs to accomplish its goals.
There are other ways of accomplishing the same goals. The government can subsidize the refinery industry as needed to stabilize prices. Or it can finance infrastructure improvements. But, this one of the costs of eliminating fossil fuel consumption, and somebody has to pay the costs. And that somebody won’t be the industry itself.
One of the problems caused by waiting so long to address climate change is that more has to be done in a shorter period of time. The great advantage of a carbon tax that is fully refunded to taxpayers is that can be introduced at low levels and ramped up slowly to make the transition smoother and create market forces that will support the transition. Having waited so long, it’s going to be much bumpier and it’s going to take extra effort and dollars to make sure we’re using market forces to our advantage rather than having them work strongly against us.
What the article proposes is that government purchase shuttered refineries and operate them to avoid sharp price shocks like the US is experiencing with refined petroleum products. The refining industry is acting just like we should expect rational actors to act in a free market system. The industry is used to investing capital in refineries based on the rate of return over the useful life of the investment. The transition away from fossil fuels effectively shortens the useful life of new capital investment. Rational market actors respond by requiring a higher rate of return - increased profits.
The Government doesn’t have to turn a profit. So, it can restart shuttered refineries to smooth out price shocks caused by refineries closures that anticipate the future reduced demand but don’t account for the short-term capacity need to avoid spikes in prices.
There are potential downsides to this proposal. One is that it may cause refinery owners to close plants even sooner in order to cash out on the government’s dime. So, the government could be forced to purchase much more than it really needs to accomplish its goals.
There are other ways of accomplishing the same goals. The government can subsidize the refinery industry as needed to stabilize prices. Or it can finance infrastructure improvements. But, this one of the costs of eliminating fossil fuel consumption, and somebody has to pay the costs. And that somebody won’t be the industry itself.
One of the problems caused by waiting so long to address climate change is that more has to be done in a shorter period of time. The great advantage of a carbon tax that is fully refunded to taxpayers is that can be introduced at low levels and ramped up slowly to make the transition smoother and create market forces that will support the transition. Having waited so long, it’s going to be much bumpier and it’s going to take extra effort and dollars to make sure we’re using market forces to our advantage rather than having them work strongly against us.
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Re: Nationalizing the Oil Industry
One of the problems caused by climate change propaganda is that the transition is clusterkerfuckled and key infrastructure, including refining, does not get financed or permitted.
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Re: Nationalizing the Oil Industry
The main problem is that folks like you fail to take the science seriously and dismiss it as propaganda. What you get when society goes into denial about a major long-term problem and simply kicks the can down the road is a clusterfuck. The petroleum industry has understood the consequences of global warming for at least 30 years, and chose to respond to it with an anti-science propaganda campaign. We blew our chance to do things the easy way. Now it's going to be lots rougher. New rule: denialists and their enablers don't get to complain about the results of their bad calls.
he/him
When I go to sea, don’t fear for me. Fear for the storm.
Jessica Best, Fear for the Storm. From The Strange Case of the Starship Iris.
When I go to sea, don’t fear for me. Fear for the storm.
Jessica Best, Fear for the Storm. From The Strange Case of the Starship Iris.
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Re: Nationalizing the Oil Industry
That is exactly right, Res. Good folks like me often fail to dismiss science as propaganda and also take it seriously. I could not agree more.Res Ipsa wrote: ↑Fri Jul 01, 2022 4:53 pmThe main problem is that folks like you fail to take the science seriously and dismiss it as propaganda. What you get when society goes into denial about a major long-term problem and simply kicks the can down the road is a clusterfuck. The petroleum industry has understood the consequences of global warming for at least 30 years, and chose to respond to it with an anti-science propaganda campaign. We blew our chance to do things the easy way. Now it's going to be lots rougher. New rule: denialists and their enablers don't get to complain about the results of their bad calls.
I accept the new rule. Does it apply to everyone?
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Re: Nationalizing the Oil Industry
The huge amount of money that fossil fuel industries poured into combating the fairly mildly phrased explanations of the effects of continued carbon dioxide emissions that were current in past decades, and the quite limited suggestions for counter measures then put forward by climate scientists, just shows how well they understood the science, and how well aware they were of the direction things were inevitably going.
The wonderful thing for the fossil fuel industry in the present situation is that since they succeeded in blocking the limited measures that would have been appropriate to less urgent circumstances, we have now arrived at a stage where considerably more severe measures are required to even begin to reduce the scale of the climate breakdown that is now very obviously happening. So now they must be grinning all over their faces as they see the reluctance of even well-informed and honest political leaders to explain to their populations just what it is going to cost them to take effective action now.
Maksutov:
That's the problem with this supernatural stuff, it doesn't really solve anything. It's a placeholder for ignorance.
Mayan Elephant:
Not only have I denounced the Big Lie, I have denounced the Big lie big lie.
That's the problem with this supernatural stuff, it doesn't really solve anything. It's a placeholder for ignorance.
Mayan Elephant:
Not only have I denounced the Big Lie, I have denounced the Big lie big lie.
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Re: Nationalizing the Oil Industry
Cost them? No, everyone knows the Democrats are just going to tax the rich and only the rich. Why would they lie about something like that?So now they must be grinning all over their faces as they see the reluctance of even well-informed and honest political leaders to explain to their populations just what it is going to cost them to take effective action now.
The best part about this is waiting four years to see how all the crazy apocalyptic predictions made by the fear mongering idiots in Right Wing media turned out to be painfully wrong...Gasoline would hit $10/gallon. Hyperinflation would ensue.
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Re: Nationalizing the Oil Industry
Hawkeye wrote: ↑Sat Jul 02, 2022 7:28 pmCost them? No, everyone knows the Democrats are just going to tax the rich and only the rich. Why would they lie about something like that?So now they must be grinning all over their faces as they see the reluctance of even well-informed and honest political leaders to explain to their populations just what it is going to cost them to take effective action now.
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