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Is it time to nationalize the U.S. oil and gas industry?

General discussions of the systemic, societal and civilisational effects of depletion.

Re: Is it time to nationalize the U.S. oil and gas industry?

Unread postby Economix » Thu 29 May 2008, 11:50:08

A response to RocDoc, then signing off....

1. I stand by my statement that most Americans would consider a $400 million retirement package for one person (the past CEO of ExxonMobil) to be excessive. If you think it's not excessive, that's of couse your personal opinion, but I challenge you to disagree with the statement itself that "most Americans" right now in 2008 would find that excessive.

2. If the private oil industry desperately needed more money to explore for oil, they wouldn't be paying out huge and growing dividends to their shareholders at this time.

3. Your ideological comments about Leninism and Communism are just name-calling. I'm a capitalist raising legitimate questions about how the world would fund a massive transition away from fossil fuels. One position would be diverting profits from the oil industry that were not being reinvested in exploration or refining capacity.

4. Your comments about my Christian beliefs and objections to using my Saviour's name as an obscenity are quite revealing. If you need to insult someone's cherished religious beliefs to get your point across, I have doubts about your reasoning ability. Is it not possible to be respectful in a forum like this, or does it always have to degenerated into name-calling, nastiness and obscenity? If the later case is true, I certainly don't belong here and neither do others who have sincere religious beliefs.

The question is: Do you want to limit the discussion and drive away people like me for the sake of being nasty about their religion? If so, you win, buddy.

A note to BigTex:

As a new member of PeakOil forums, I had hoped to be able to at least have one discussion on a legit issue without being called a "Leninist Commie who worships blow-up dolls." It's not that I have a thin skin (I'm 50 and I've been in far rougher places than most people -- 32 countries in all -- including multiple life-threatening situations, detention by secret police, etc.). It's just that I hoped that PeakOil would have a higher level of debate and discussion.

Others posters have added valuable insights, but the general direction is down the toilet here. I won't add my thoughts to PeakOil again for that reason. I bet that lots of other posters have had the same experience.

Best of luck.
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Re: Is it time to nationalize the U.S. oil and gas industry?

Unread postby BigTex » Thu 29 May 2008, 12:08:16

$this->bbcode_second_pass_quote('Economix', 'A') note to BigTex:

As a new member of PeakOil forums, I had hoped to be able to at least have one discussion on a legit issue without being called a "Leninist Commie who worships blow-up dolls." It's not that I have a thin skin (I'm 50 and I've been in far rougher places than most people -- 32 countries in all -- including multiple life-threatening situations, detention by secret police, etc.). It's just that I hoped that PeakOil would have a higher level of debate and discussion.

Others posters have added valuable insights, but the general direction is down the toilet here. I won't add my thoughts to PeakOil again for that reason. I bet that lots of other posters have had the same experience.

Best of luck.


Best of luck to you too.

If you ever want to come back, please feel free.

Pretty good group here.

You will find that the stuff you cite as offensive is mostly just newbie hazing. Once you get in the groove you can have some pretty high-end discussions of just about anything you want to cover.

Thanks for stopping by.
:)
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Re: Is it time to nationalize the U.S. oil and gas industry?

Unread postby vision-master » Thu 29 May 2008, 12:43:29

$this->bbcode_second_pass_quote('Economix', 'A') response to RocDoc, then signing off....

1. I stand by my statement that most Americans would consider a $400 million retirement package for one person (the past CEO of ExxonMobil) to be excessive. If you think it's not excessive, that's of couse your personal opinion, but I challenge you to disagree with the statement itself that "most Americans" right now in 2008 would find that excessive.

2. If the private oil industry desperately needed more money to explore for oil, they wouldn't be paying out huge and growing dividends to their shareholders at this time.

3. Your ideological comments about Leninism and Communism are just name-calling. I'm a capitalist raising legitimate questions about how the world would fund a massive transition away from fossil fuels. One position would be diverting profits from the oil industry that were not being reinvested in exploration or refining capacity.

4. Your comments about my Christian beliefs and objections to using my Saviour's name as an obscenity are quite revealing. If you need to insult someone's cherished religious beliefs to get your point across, I have doubts about your reasoning ability. Is it not possible to be respectful in a forum like this, or does it always have to degenerated into name-calling, nastiness and obscenity? If the later case is true, I certainly don't belong here and neither do others who have sincere religious beliefs.

The question is: Do you want to limit the discussion and drive away people like me for the sake of being nasty about their religion? If so, you win, buddy.

A note to BigTex:

As a new member of PeakOil forums, I had hoped to be able to at least have one discussion on a legit issue without being called a "Leninist Commie who worships blow-up dolls." It's not that I have a thin skin (I'm 50 and I've been in far rougher places than most people -- 32 countries in all -- including multiple life-threatening situations, detention by secret police, etc.). It's just that I hoped that PeakOil would have a higher level of debate and discussion.

Others posters have added valuable insights, but the general direction is down the toilet here. I won't add my thoughts to PeakOil again for that reason. I bet that lots of other posters have had the same experience.

Best of luck.


A little thin skinned I'd say......... :razz:
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Re: Is it time to nationalize the U.S. oil and gas industry?

Unread postby Cashmere » Thu 29 May 2008, 13:48:57

$this->bbcode_second_pass_quote('', 'I') think today's ExxonMobile shareholder meeting (read the news postings) demonstrates that certain corporate boards and executives are incredibly narrow-minded about the dangers we now face -- and how to address them.


I disagree.

Boards are extremely easy to understand and predict.

They will do what they think is best to raise stock value.

That simple.

It's not a question of narrow or open mindedness, public service, private greed, or anything else.

Just like you can expect a guard bee to attack anything coming near the hive entrance, you can expect CEOs and boards to do whatever they need to do to raise stock value.

So Exxon's announcement was perfectly predictable.
Massive Human Dieoff <b>must</b> occur as a result of Peak Oil. Many more than half will die. It will occur everywhere, including where <b>you</b> live. If you fail to recognize this, then your odds of living move toward the "going to die" group.
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Re: Is it time to nationalize the U.S. oil and gas industry?

Unread postby BigTex » Thu 29 May 2008, 14:23:56

$this->bbcode_second_pass_quote('pstarr', 'T')he lack of imagination and historical perspective at PO regularly dumbfound me. There was a time not long ago when government was not perceived a priori as bad thing, except at the fringes (The Goldwater binge was the last example, in the 1960's).

***

How did we become an infantile auto-dependent suburban country tied to oil waste? Why did we not use oil taxes to build a less oil-dependent system? Why did we spend our wealth on crap. Because we hate government. Why? Most recently because of Vietnam.


Watergate and Vietnam together were a powerful one-two punch.

Also, making all of the future promises in the form of Medicare and Social Security with no way to pay for them also undermined the collective sense of confidence in government.

Once the U.S. went to a fiat currency, the value of the dollar has steadily eroded, and along with it the credibility of the government to provide a stable environment in which to do business.

The Great Society and other social engineering projects have mostly been a complete failure.

As the Iraq war enters its seventh year, we are daily reminded that war is just another big government program with no apparent purpose other than to give government agencies something to do and a pretext for more spending.

Overall, I think what people hate is the size of the current government, not the idea of government.

The fundamental problem is that it is vastly easier to make poor financial decisions with someone else's money than with your own. When something doesn't work out as expected, all a politician needs to do is raise taxes or borrow more money. This, to me, is the story of how the government got so big in the first place--it's a multi-trillion dollar "pin the tail on the donkey" problem solving strategy.
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Re: Is it time to nationalize the U.S. oil and gas industry?

Unread postby vision-master » Thu 29 May 2008, 14:32:52

$this->bbcode_second_pass_quote('', 'A')s the Iraq war enters its seventh year, we are daily reminded that war is just another big government program with no apparent purpose other than to give government agencies something to do and a pretext for more spending.


As the Iraq war enters its seventh year, we are daily reminded that war is just another big [s]government[/s] oil program with no apparent purpose other than to give [s]government[/s] big oil agencies something to do and a pretext for more spending (tax payers dollars for bigger corporate profits).

BigTex, come on man.........
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Re: Is it time to nationalize the U.S. oil and gas industry?

Unread postby vision-master » Thu 29 May 2008, 15:01:04

$this->bbcode_second_pass_quote('pstarr', 'B')igTex it hardly matters what happened in the past. But private industry just is not capable of addressing the peakoil dilemma. We have to ask ourselves: How do we pay for something that profits no one, but might save our nation?

Only a Manhattan Project- sized reindustrialization around renewable electrical energy and the revival of railroad can help us. This will require eminent domain, new taxes, and redeployment of the federal bureaucracy away from economic management into actual production. Is this going to happen? Never. Not in a million years because it is unacceptable and unimaginable for a people now completely indoctrinated to hate all forms of government.

We will die as the stooges of the wealthy before we will take control of our own lives.


+1.0 :razz:
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Re: Is it time to nationalize the U.S. oil and gas industry?

Unread postby rockdoc123 » Thu 29 May 2008, 15:19:20

$this->bbcode_second_pass_quote('', 'I') stand by my statement that most Americans would consider a $400 million retirement package for one person (the past CEO of ExxonMobil) to be excessive. If you think it's not excessive, that's of couse your personal opinion, but I challenge you to disagree with the statement itself that "most Americans" right now in 2008 would find that excessive.


"most Americans" (75% according to a Gallup poll) believe in the paranormal. Does that suddenly make ghosts real? It's an opinion and irrelevant in terms of the argument about compensation for CEOs. He entered into an arrangement years ago when oil was in the $20- $30 range, any share holder who bought stock at that time and held onto it has seen somewhere around a 1000% increase in their investment. He's simply being paid for the value he has added.

$this->bbcode_second_pass_quote('', 'I')f the private oil industry desperately needed more money to explore for oil, they wouldn't be paying out huge and growing dividends to their shareholders at this time


Companies pay dividends to keep shareholders. One of the main reasons shareholders buy into the majors is for the dividends not for any anticipated share value growth (although that has been a bonus for most). As I said previously companies will explore for oil where it makes economic sense to do so. As an example if the tax situation in the US is onerous such that I cannot get a reasonable return on my invested dollars I will not invest no matter how much free cash flow I am generating. What I will do is move that money to another jurisdiction with more favorable terms, buy back shares or increase dividends. This is the disconnect you have missed.

$this->bbcode_second_pass_quote('', 'Y')our ideological comments about Leninism and Communism are just name-calling. I'm a capitalist raising legitimate questions about how the world would fund a massive transition away from fossil fuels. One position would be diverting profits from the oil industry that were not being reinvested in exploration or refining capacity


Let me see, you call yourself a free market capitalist but you are wanting to expropriate funds from oil companies that aren't doing what you want them to do. How is that not a socialistic view? This is exactly what Chavez is proposing and he is a self-described communist. Capatilism speaks to letting the market work....not manipulating it.

$this->bbcode_second_pass_quote('', 'Y')our comments about my Christian beliefs and objections to using my Saviour's name as an obscenity are quite revealing. If you need to insult someone's cherished religious beliefs to get your point across, I have doubts about your reasoning ability. Is it not possible to be respectful in a forum like this, or does it always have to degenerated into name-calling, nastiness and obscenity? If the later case is true, I certainly don't belong here and neither do others who have sincere religious beliefs.


As I said .....I couldn't give a stuff what your belief system is...it is irrelevant to arguments and it baffles me why you think it should be. You were the one who decided you wanted to wave around the religious beliefs issue here, based on a statement "crist sakes" that is neither an obscenity by any stretch of anyones bizarre imagination nor should it be considered as an insult to a religion no moreso than if I said "mios dios" in a sentence when I was in Colombia. It is a common, everyday explitive that I likely hear hundreds of time's of the day since i moved to this side of the pond. If you take my post as having "name calling, nastiness and obscenity" then your delicacies are not attuned to the internet as a whole and certainly not anything to do with the oil industry where rough language flys freely.

It's too bad you decided to leave as I think you would have learned a lot from this site, although I'm sure you wouldn't have appreciated the large number of muslim, hindu, buddhist, agnostics and atheists here who would have irritated your sensibilities.

$this->bbcode_second_pass_quote('', 'I')f it weren't for Christians, I'd be a Christian.-- Mahatma Ghandi
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Re: Is it time to nationalize the U.S. oil and gas industry?

Unread postby blindmango » Thu 29 May 2008, 15:43:11

Hi All:

It is past time to nationalize the oil and gas industry. This is about survival, not about capitalism. Our entire economy is based on low priced oil and gas. We are now seeing the result of higher energy costs. The following steps should be taken immediately:

Nationalize the oil and gas industry, give investors a fair price for their stock.

Start construction of additional refineries.

Develope national standards for gas and oil usage at all levels. This may be accomplised via a voucher system. This will spur mass transit and the production of fuel efficient autos and other systems.

Begin stockpiling crude oil at a national level.

The goal is to put America on an oil and gas diet and at the same time insure that we have enough oil and gas in the future. This may allow America enough time to develope alternative fuels.

I know this does not sound like free market economics, but if the free market was going to address this issue, it would have happened by now.

The alternative to performing these steps is almost unthinkable. Disruptions in our supply of oil and gas for any reason would cripple our economy and make us unsafe in an unsafe world.
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Re: Is it time to nationalize the U.S. oil and gas industry?

Unread postby Nickel » Thu 29 May 2008, 15:50:26

$this->bbcode_second_pass_quote('rockdoc123', 'A')bsolutely not, simply because private enterprise has a reason to be efficient.


You're confusing efficiency and greed. Lots of privately-owned businesses are grossly inefficient because of various aspects of their profit model. Pennsylvania's steel industry, for example, was greatly marginalized a generation ago because the guys who owned the things didn't care to see any of the cream they were sucking off the top be skimmed off to modernize their plants, equipment, and production methods. 'Let it be the problem of the next bunch of guys; let them take the hit' was the mindset. Self-interest is supposed to be force behind efficiency in the system you champion... alright, fair enough: but are governments not self-interested? Are not nations self-interested? There are more expressions of self-interest (and thus, efficiency) than just having a bigger yacht next year than you have this year.


$this->bbcode_second_pass_quote('rockdoc123', 'G')overnment run organizations do not.


So goes the old saw, but conversely, the US health care system is largely in private hands and it's grossly inefficient. But a lot of people are making a killing in it (pun intended). Meanwhile, in countries with socialized medicine, the profit motive has been removed, or largely removed, making those systems much more efficient. Take the examples of the North American systems, contrast to each other. The United States spends 220% as much per person on health care, all told, than Canada does. But Canadians live, on average, 2 years and 4 months longer, Canada's infant mortality rate is 25% lower, and Canadians don't have to go bankrupt to deal with a major illness in the family. A profit margin isn't necessarily a guide to an efficient system... in many cases, it's an impediment.


$this->bbcode_second_pass_quote('rockdoc123', 'Y')ou get the nationalization, everyone leaves ….now where would you come up with the capital to spend on oil and gas investment.


You maintain a controlling interest and open up the minority shares to investors. And good businessman will recognize that 49% of something is better than 100% of nothing.


$this->bbcode_second_pass_quote('rockdoc123', '')$this->bbcode_second_pass_quote('', 'T')hroughout U.S. history, true national emergencies almost always trump shareholder rights, whether it be specific government intervention on the supply side (WW II) or specific government intervention on the price side (e.g., Lincoln, Wilson, Roosevelt, Eisenhower, JFK and Nixon). Shareholder rights are ultimately at the mercy of the political system and greater historical context -- like it or not. Maybe that's good, maybe it's bad.


That’s complete and utter Leninist nonsense.

How so? How is he wrong? Simply disparaging the character of his point (or him) is not the same thing as disproving it.


$this->bbcode_second_pass_quote('rockdoc123', 'i')f you paid market fair value for gas companies in the US right now you would have spent more than they are worth.

What prompts you to use the word "fair" with a straight face in this sentence? Try reading it a couple of times and see if you spot the inconsistency.


$this->bbcode_second_pass_quote('rockdoc123', 'a')s a famous now overweight band once said...."Bububabeee you ain't seen nothing yet".

That was said on the context of sexual invitation, you do realize that, right? :)
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Re: Is it time to nationalize the U.S. oil and gas industry?

Unread postby rockdoc123 » Thu 29 May 2008, 16:44:39

$this->bbcode_second_pass_quote('', 'T')he United States spends 220% as much per person on health care, all told, than Canada does. But Canadians live, on average, 2 years and 4 months longer, Canada's infant mortality rate is 25% lower, and Canadians don't have to go bankrupt to deal with a major illness in the family. A profit margin isn't necessarily a guide to an efficient system... in many cases, it's an impediment.


The Canadian system is not something to hold up as standard to which all should strive. Doctors are leaving Canada in droves because of the limits to what they can bill to health care. The hospitals are hugely overcrowded, private health care is largely banned, there is not enough nursing staff to perform effective triage, so if you show up at an emergency room with heart palpatations you will likely have to wait in line for many, many hours while they treat all the kids with runny noses. A year ago I sat with a family member for 13 hours in an emergency room while they suffered through congestive heart failure. The numbers you quote miss this, Liars, damn liars and statisticians I'm afraid.

$this->bbcode_second_pass_quote('', 'Y')ou maintain a controlling interest and open up the minority shares to investors. And good businessman will recognize that 49% of something is better than 100% of nothing.


Which simply means the gov't has to pay 51% of the costs now (which they never paid before) to get 51% of the cashflow. Given that this is a capital intensive industry they do not get free cashflow to put elsewhere it gets invested or goes to operating costs, overhead etc. This is exactly why nationalization has almost never worked. A case in point is Venezuela which nationalized in 1975 and then found that by the nineties they had to reopen their industry simply because they did not have enough cashflow from the oil fields to both reinvest to keep the oil flowing and invest in social programs. This is precisely why governments got out of the oil business years ago. It's called "other people's money" , basically they let the companies take 100% of the risk, they make them pay some form of royalty and taxes and let them take the remainder as profit. Your comment on 49% being better than nothing isn't necessarily true. Case in point is the situation in Alberta where royalties were raised to egrigous levels this past fall. There was an immediate exodus of capital and rigs....it went where they could make a decent profit (BC, Saskatchewan, Montana, Wyoming). It wasn't until the Alberta gov't took a second look and fixed some of the problems that activity picked back up.

$this->bbcode_second_pass_quote('', 'W')hat prompts you to use the word "fair" with a straight face in this sentence? Try reading it a couple of times and see if you spot the inconsistency.


no inconsistency at all, although I could have been more eloquent in my use of the english language I suppose. As I explained fair market value is determined by what a shareholder is willing to sell his shares for. Much of that intrinsic value is based on how much upside he believes there is in that particular company. As an example a particular shale gas company I know is currently trading at 20 times cash flow/share compared to the vast majority of conventional gas players who trade in the order of 7 times cash/flow per share. In the case of the conventional players their break up value based on 2P reserves (NAV) is usually pretty close to what they are trading at. This isn't the case for this shale gas company simply because shareholders view there is a large amount of upside yet to be proven in lands which have not been drilled or uneconomic wells which someday might become economic because of rising prices. If a gov't went in and purchased this company at it's current NAV it would be at a price below fair market value and would be viewed as expropriation.

$this->bbcode_second_pass_quote('', 'T')hat was said on the context of sexual invitation, you do realize that, right?


A fine quotation is a diamond on the finger of a man of wit, and a pebble in the hand of a fool. - Joesph Roux
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Re: Is it time to nationalize the U.S. oil and gas industry?

Unread postby rockdoc123 » Thu 29 May 2008, 16:59:19

$this->bbcode_second_pass_quote('', 'N')ationalized is what Iran, Iraq, and Saudi Arabia already did. And some are now our friends. Some not. Some we call 'communist' and murder (Dr. Mohammad Mossadegh in Iran) or 'terrorist', invade, and murder (Saddam in Iraq). Some we just hold hands with and get all squishy . (Georgy Boy and His Royal Highness) Get over it.


The only place you could argue that nationalization has been at all successful is Saudi Arabia. In Iran they opened up their industry to service contracts, hence there are a ton of foreign companies producting oil there including Statoil, Eni, Total. In Iraq they had done the same and were planning on doing so again prior to the second Gulf War (I was involved in one of the bids back then). The reason for this is they were strapped for cash, they can't run their countries and have the free cash flow to invest in social programs as well. Why did it work in Saudi Arabia, the answer is simple Ghawar. They basically nationalized a huge find that had ridicuously low lifting costs.....they could produce the existing wells without much in the way of investment, accumulate large wealth and build up a truly efficient oil industry from that. They are only now faced with the kind of lasting huge reinvestments that other countries have had for a long, long time. Finding and Development costs in Saudi Arabia are a couple of dollars /bbl in the continental US they are around $25/bbl. This is why it could not work in North America and also why it will not work in Venezuela.
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Re: Is it time to nationalize the U.S. oil and gas industry?

Unread postby BigTex » Thu 29 May 2008, 17:41:31

Wait! I have a great idea.

How about we have the U.S. nationalize the energy industry of ANOTHER COUNTRY?

Start with Iraq, then do Venezuela, maybe Kuwait after that.

Man, that's one of the best ideas I've had in a while.
:)
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Re: Is it time to nationalize the U.S. oil and gas industry?

Unread postby MonteQuest » Thu 29 May 2008, 20:43:23

$this->bbcode_second_pass_quote('blindmango', ' ')Our entire economy is based on low priced oil and gas.


The era of cheap, readily available fossil fuels is over, nationalized oil and gas or not. Get used to it.

This "ecomomy" is over as well.

$this->bbcode_second_pass_quote('', 'S')tart construction of additional refineries.


"Refiners have, in fact, been expanding capacity for some time. If you look at the last decade, we’ve added the equivalent of 10 new refineries and if you look at the announced capacity expansions which are to come on line between now and 2011, you’re talking about an additional eight more refineries."--CEO of American Petroleum Institute, Red Cavaney.

$this->bbcode_second_pass_quote('', 'B')egin stockpiling crude oil at a national level.


Duh? Ever hear of the SPR? On April 2, 2008, the SPR inventory exceeded 700 million barrels, the highest level ever previously held.

$this->bbcode_second_pass_quote('', 'T')he goal is to put America on an oil and gas diet and at the same time insure that we have enough oil and gas in the future. This may allow America enough time to develope alternative fuels.


The US has less than 2% of the world's reserves. We import 60% of our oil. We don't have the oil or production to nationalize to make any significant difference.

$this->bbcode_second_pass_quote('', 'T')he alternative to performing these steps is almost unthinkable. Disruptions in our supply of oil and gas for any reason would cripple our economy and make us unsafe in an unsafe world.

Powerdown is unthinkable? Accepting limits is unthinkable?

You think invading Iraq to ensure ME oil flow to the US made us safer in this unsafe world?
A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
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