Nouriel Roubini: Is Resource Nationalism Back?

A look at Brazil, Iraq, China … and Alberta.

…Even the U.S. and Canada have been tweaking their fiscal regimes concerning oil production. In 2008, the Canadian province of Alberta brought in new regulations recalibrating oil sands royalties depending on the oil price. Doing so would provide funds for needed infrastructure to maintain development in the sector. However, at current oil prices, the provincial take is very limited and mostly stems from conventional oil and natural gas production. Given the fall in gas prices and output, the province’s fiscal accounts are thus quite strained in 2009.

The U.S., for its part, is tweaking its fiscal regime concerning oil producers, as higher taxes on resource extraction are one of the ways that the government hopes to limit the future fiscal deterioration. However, the increase in the excise tax on Gulf of Mexico oil production has been deferred. Further development of these reserves, including the “giant” find BP announced in early September, will rely on clarity about these regulations.

The energy sectors of most OPEC members, especially those in the Middle East, have long been dominated by the national oil companies with the proceeds saved or spent by the governments. This state influence is long standing however. Some, especially in North Africa, have tried to lure new expertise for harder to extract resources. However, some state-owned oil companies have sought to increase production capacity, even if current production cuts constrain near-term output. Saudi Arabia, which sees itself as the oil market’s stabilizer as it absorbed the bulk of OPEC production cuts, was one of few countries to actually add new production capacity in 2008 and 2009.

Forbes