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News Nationalization of Energy Production

  1. Jan 26, 2011 #1
    What is your opinion of nationalized energy? What are the pros and cons of a nationalized energy sector vs capitalist energy sector?

    I know that the U.S. has always been very strongly against nationalization specifically of energy (oil). A good deal of Americas foreign activities throughout the century have been dedicated specifically to keeping oil production all over the world a capitalist enterprise.

    In terms of U.S. interests, what is the difference between a foreign country nationalizing, or capitalizing oil? And on the flip side, what is the difference for the foreign country?

    Besides the obvious fact that oil industry is way to powerful to let it ever happen, what would be the consequence of nationalizing United States energy resources including oil, coal, and natural gas?
  2. jcsd
  3. Jan 26, 2011 #2
    I'm entirely negative, and see no cons. Nationalization is un-American, let's not follow in the steps of Cuba and Venezuela. If the government were to run the energy companies, prices would rise because of lack of competition.

    The oil industry is not powerful. Government is.

    The natural price mechanisms of the market would disappear, and as a consequence either too much or too little energy would be produced. And it would become more expensive. Today we have very cheap gasoline in America compared to most other countries, and this is precisely because the companies responsible for the supply are private entities.
    Last edited: Jan 26, 2011
  4. Jan 26, 2011 #3
    Do you have any evidence to back this up? What I mean by nationalization of oil, is that the oil itself would be under the collective ownership of american citizens. Obviously we would need to hire private contractors to mine the oil and distribute it. The only obvious difference I see, would be that a much larger percentage of the profits from oil exploration would go to the nation rather than to a corporation. The difference would merely be in ownership of the oil.

    Isn't it possible to have national ownership of the oil in the ground while also selling that oil on the private market. In the end you have a global oil market, in which the U.S. contribution is slim, which dictates oil prices anyways don't you?
  5. Jan 26, 2011 #4


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    And what about the private companies that currently own those mineral rights? I assume you are referring to domestic oil?

    I have my popcorn, ok, explain how this would happen.
  6. Jan 26, 2011 #5
    The argument against nationalization on the basis that corporations are not powerful is just bogus. We can elect those in our government. We cannot elect CEO's and they don't 'owe' anything to any country or anyone. Corporations do not claim allegience to any nation. And they are only driven by profit.To say that oil companies are less powerful than goverment IMO is just wrong. If oil prices were raised so that gas prices hit say 6 or 7 dollars our country would collapse.

    That said, no way should energy be nationalized. I coudn't imagine anything more destructive to business and the country.

    It's funny that the arguments for and against nationalization are basically the same.
    The only difference is those for nationalization argue that we can elect our government through our votes at the ballot box.
    Those against nationalization argue that we can cast our votes through our dollars.

    They are both right in certain cases, it just depends on what you plan on nationalizing. I am against nationalizing everything except healthcare, and I think it should be managed on a state level and paid for through tax. But healthcare is so much different as the idea of profiting off of healthcare is just wrong as the quality of care is cut into by profits.
  7. Jan 26, 2011 #6
    Do you mean that the Government should just take the oil from the private companies? I think that is morally wrong.

    History also provides plenty of evidence that collective ownership is ineffective and leads to poverty and misery. The Soviet Union, Vietnam and Cuba are good examples.
  8. Jan 26, 2011 #7
    You can even elect politicians who want to nationalize corporations, which makes government far more powerful than corporations.

    Which they should.

    Why? If the methods of the Soviet Union are bad in all other sectors of the economy, why would health care be any different?

  9. Jan 26, 2011 #8


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    Consider you job, or a job in a field you hope to have in the future, or your business you hope to create, or your investments. How would feel about the government simply taking over not only the entire company, but every company in the field, and wiping out your investments?
  10. Jan 26, 2011 #9
    I just explained why profiting off of healthcare is wrong. The money that could be used for better care instead is turned to profit. You don't have a choice when it comes to healthcare. You need it. Why should that be a profitable business. Have you not heard of people being turned down for insurance because of a proir health condition? They are turned down because they are not a risk an insurance company is willing to take. Because they are looking to profit. And their prior conditions lead them to believe they will be a bad investment. Is that how you want yourself and your family to be treated? A bad investment?
  11. Jan 26, 2011 #10
    The argument "it's needed, so we shouldn't have profit in it" can be extended to a whole host of things, such as food, water, and housing.
  12. Jan 26, 2011 #11
    True. The difference is everyone deserves and requires the same health care it is not dependant of personality or preference, though you could say that some people would prefer a holistic doctor. Food and housing is a preference especially housing and already if you can't afford enough food to survive you will recieve help through entitlement programs.Water use is dependant on the person using the water. Meaning how much water they choose to buy is up to them. It is not your choice if you get cancer.
  13. Jan 26, 2011 #12
    i guess it must work. in alabama we lease offshore drilling. apparently, leases are also issued for coal mining on state and federal lands.
  14. Jan 26, 2011 #13


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    The real problem- when has government efficiently run anything? Do we really want to entrust the energy sector to bureaucratic red tape, lobbyists, and politics? As it is politics are completely undercutting the oil sector, with the drilling moratorium.
  15. Jan 26, 2011 #14


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    This thread is a bit of a mess.

    Now would be a good time to post a tutorial on mineral rights. Many homeowners do not own their mineral rights if their land is in an area that anyone had any hope od ever finding anything. I was never able to buy the mineral rights to any of my homes because they had already been previously sold. I did have a friend in Kansas that does own mineral rights and yes, he struck oil, and yes he owns (or did) his own little oil company and he sells what he pumps. That's unusual.

  16. Jan 26, 2011 #15
    Isn't that exactly how Alaska does it?
  17. Jan 26, 2011 #16
    "Big Oil" has no such ability to control prices. The global price of crude oil is controlled by organizations such as OPEC.

    That's if you have a monopoly. If you have competition in a free market, where people can dump one company/doctor/hospital and go to another, then quality goes up. That's how a market works. Nothing wrong with profiting off of healthcare anymore so than profiting off of food, housing, automobiles, etc...
    Last edited: Jan 26, 2011
  18. Jan 26, 2011 #17
    i am aware of mineral rights. i am also aware that they are not all private, and that extraction rights are leased on public lands.
  19. Jan 26, 2011 #18
    I'm in favor of letting the (US) military drill for oil on (existing) US Government owned land - and selling it to domestic refiners. It would reduce the need for military funding - savings applied to deficits - and reduce our import requirements.

    BTW - I would also be in favor of the military drilling and mining on conquered lands (sorry - I'm a Viking).:biggrin:
  20. Jan 26, 2011 #19
    This is a fallacy; oil companies do not own the oil. The landowner does.

    They lease drilling rights to it from property owners. Sometimes this is a private individual. but for the vast majority of leases the other party is a public entity (state or federal government in the United States).

    The difference between the American (or Western) model and the standard elsewhere is who does the digging, not who owns the resources. Private companies are contracted to do the work by the property owners in the West, in voluntary transactions subject to local laws and regulations. In other parts of the world, the government has a monopoly on the job; the property owner must, by law, hire the GSE to exploit the resources.
  21. Jan 26, 2011 #20


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    Not if the landowner doesn't own the rights. Many homeowners do not own the rights, see my previous post on this.

    I owned homes in Texas and Exxon owned the rights. I was assured that they woudn't be selling the land if they thought there was any reason to ever drill, but I had to sign a waiver anyway saying that I understood that they could, at any time, tear my land up. If they decided to try.
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