Nationalization of Energy Production

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  • #1
jreelawg
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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?
 

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  • #2
thephysicsman
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What is your opinion of nationalized energy? What are the pros and cons of a nationalized energy sector vs capitalist energy sector?

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.

oil industry is way to powerful to let it ever happen,

The oil industry is not powerful. Government is.

what would be the consequence of nationalizing United States energy resources including oil, coal, and natural gas?

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.
 
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  • #3
jreelawg
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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.

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?
 
  • #4
Evo
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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.
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.
 
  • #5
BilPrestonEsq
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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.
 
  • #6
thephysicsman
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What I mean by nationalization of oil, is that the oil itself would be under the collective ownership of american citizens.

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.
 
  • #7
thephysicsman
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The argument against nationalization on the basis that corporations are not powerful is just bogus. We can elect those in our government.

You can even elect politicians who want to nationalize corporations, which makes government far more powerful than corporations.

Corporations are only driven by profit.

Which they should.

I am against nationalizing everything except healthcare

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

the idea of profiting off of healthcare is just wrong

Why?
 
  • #8
mheslep
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What is your opinion of nationalized ...
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?
 
  • #9
BilPrestonEsq
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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?
 
  • #10
Ronnin
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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?

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.
 
  • #11
BilPrestonEsq
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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.

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.
 
  • #12
Proton Soup
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i guess it must work. in alabama we lease offshore drilling. apparently, leases are also issued for coal mining on state and federal lands.
 
  • #13
Mech_Engineer
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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.
 
  • #14
Evo
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i guess it must work. in alabama we lease offshore drilling. apparently, leases are also issued for coal mining on state and federal lands.
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.

http://geology.com/articles/mineral-rights.shtml
 
  • #15
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?

Isn't that exactly how Alaska does it?
 
  • #16
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.

"Big Oil" has no such ability to control prices. The global price of crude oil is controlled by organizations such as OPEC.

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.

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...
 
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  • #17
Proton Soup
214
1
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.

http://geology.com/articles/mineral-rights.shtml

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.
 
  • #18
WhoWee
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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:
 
  • #19
The difference would merely be in ownership of the oil.

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.
 
  • #20
Evo
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This is a fallacy; oil companies do not own the oil. The landowner does.
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.
 
  • #21
BilPrestonEsq
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"Big Oil" has no such ability to control prices. The global price of crude oil is controlled by organizations such as OPEC.

OPEC as I just learned is "BIG OIL" it's actually worse than I thought! You kind of made it sound like an organization that protects people from big oil companies, it is a cartel of oil companies! Hear is the wikipedia page anyways:http://en.wikipedia.org/wiki/OPEC" [Broken]

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...

Well I guess this is a different topic, though I really want to comment on it. But I won't....
 
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  • #22
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.

You didn't own the property outright. Exxon owned the mineral rights to the land; you owned the right to make improvements to it, subject to the restrictions of a residential dwelling license.

This is a condition on your deed. The original landowner (be it Texas or some other private party) agreed to that condition some time ago, and you agreed (read your contracts) when you purchased the residential deed.

You need to look at problems beyond the Me and the Now.
 
  • #23
BilPrestonEsq
43
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Nationalizing of energy goes way beyond oil, without market competition advances in technology and efficiency would be stifled. On the other hand oil companies to remain in power 'snuff out' new technology to avoid loss of profit.(I'm guessing you want me to back that up huh?) Not to mention there ability to influence politics through lobbying. At first I thought nationalizing energy? No way that would create a monopoly on energy. But there already is a monopoly on energy created through a nearly unregulated free market so.... now I am confused!
 
  • #24
fourier jr
757
13
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.

government financing business & building factories? madness:
In May 1940, President Roosevelt stated that he wanted the U.S. aircraft industry able to turn out at least 50,000 planes a year. This involved expanding from little more than 2,000 planes per year to 4,000 per month.

The government developed programs to expand production capacity. First the Emergency Plant Facilities program and then the Defense Plant Corporation (DPC) were established to help construct new plants. The DPC, established in August 1940, built, equipped, and held title to several aircraft assembly plants, which then were leased to the manufacturers. These included new plants for Fisher Body, Douglas, and Bell companies, all located inland, and eightfold expansion of the Curtiss-Wright St. Louis plant. Engine plants were financed as well.
http://www.centennialofflight.gov/essay/Aerospace/WWII_Industry/Aero7.htm [Broken]
 
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  • #25
WhoWee
210
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government financing business & building factories? madness:

http://www.centennialofflight.gov/essay/Aerospace/WWII_Industry/Aero7.htm [Broken]

You are referencing a time when national security (war effort) was the priority. Please note the size and scope of "entitlement spending" during that time period.
 
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  • #26
mheslep
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OPEC as I just learned is "BIG OIL" it's actually worse than I thought! You kind of made it sound like an organization that protects people from big oil companies, it is a cartel of oil companies! Hear is the wikipedia page anyways:http://en.wikipedia.org/wiki/OPEC" [Broken]
This not correct. Read your own source. OPEC is cartel of Countries, i.e. governments, not companies.
 
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  • #27
WhoWee
210
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There's plenty of info available on OPEC.

http://www.opec.org/opec_web/en/about_us/25.htm

"The Organization of the Petroleum Exporting Countries (OPEC) was founded in Baghdad, Iraq, with the signing of an agreement in September 1960 by five countries namely Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. They were to become the Founder Members of the Organization.

These countries were later joined by Qatar (1961), Indonesia (1962), Socialist People’s Libyan Arab Jamahiriya (1962), the United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975) and Angola (2007).

From December 1992 until October 2007, Ecuador suspended its membership. Gabon terminated its membership in 1995. Indonesia suspended its membership effective January 2009.

Currently, the Organization has a total of 12 Member Countries."
 
  • #28
mheslep
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government financing business & building factories? madness:

http://www.centennialofflight.gov/essay/Aerospace/WWII_Industry/Aero7.htm [Broken]
First, the government financed, it did not build factories in the war. Second, Mech Engineer addressed efficiency and he was correct. Though the output of armament, one particular product, was huge when the US was on a war footing, that does not mean it did so efficiently or affordably, which is the real issue.
 
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  • #29
BilPrestonEsq
43
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This not correct. Read your own source. OPEC is cartel of Countries, i.e. governments, not companies.

Yeah it does say countries. It doesn't really get into ownership in detail, is this because it is nationalized in Iran for example? That would still in effect be the same as a company would it not? (Not trying to defend my claim that they are companies just asking a question) If I don't live in Iran and I buy my oil from them it would be the same as buying the oil from a private company. What's the difference? Either way I have no vote as I am not Iranian. It is still in effect the same to me as an oil company cartel. So Iran (which if not considered an enemy is certainly not an ally) is part of a cartel that sets the price of oil all over the world. I made the comment about oil companies raising the prices to 6 or 7 dollars a gallon and the response was:
posted by CAC1001:"Big Oil" has no such ability to control prices. The global price of crude oil is controlled by organizations such as OPEC
OPEC is big oil it is a cartel of government owned oil 'companies' that can change the price whenever they want. Why would you try to make it sound like they are some kind of consumer watchdog group? Really how is my original statement untrue? What is stopping them from raising prices? Our ties to Saudi Arabia? Look at that list Iran, Libya, Venezuela, not exactly friends of ours.
 
  • #30
WhoWee
210
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OPEC is big oil it is a cartel of government owned oil 'companies' that can change the price whenever they want. Why would you try to make it sound like they are some kind of consumer watchdog group? Really how is my original statement untrue? What is stopping them from raising prices? Our ties to Saudi Arabia? Look at that list Iran, Libya, Venezuela, not exactly friends of ours.

I'll assume then we agree - Exxon is just a convenient target of politicians and the media.
 

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