Should Oil Companies be nationalized?

I've been having this discuession with a friend. The american economy is completely drenched in oil, it is literally impossible to spend a dollar in the economy today without some microscopic portion going to an oil company or producer. Disruptions in oil supply are tantamount to an act of war or treason. There are more protests over high gas prices than the war these days.

With all that being said, and oil access being so incredibly crucial to the american way of life, and to the security of this country. Should the US privitize its oil companies. Many other countries, China, UAE, Saudi Arabia, Venezuela, Brazil all have private oil companies. With the weight of the american economy behind it, and the hammer of the american military we would be sure to secure oil supply for the next 20 years. Plus all the profits would go back into the government instead of a few stockholds.

obviously the bad side is we are becoming less of a democracy, but at some point we will have to fight for oil (if we are not already doing it) and why would we fight to protect a companies profit? because the company provides something so essential we deem it nesecary to kill and die for. Anything that important should be controlled by the governemtn where there is some (minimal these days) level of accontablity.

ok im confused....do you want to privatise (which besides being traded on the stock market is already) or nationalise it......place it under under government control?

placed under government control. like the army to some degree. There would be an appointed Secretary of oil, and the profits would go into the budget, but the government would be in charge of developing alternatives as well.

I agree 100%, in order to keep the economy from falling, oil needs to be nationalized and rationed.

That would be most interesting, according to Bush and Co. there's a war on isn't there?

Profiteering during war time was once considered a serious crime against the people, right?

I say a good dose of 'wind fall' taxes on the oil majors and some hefty individual tax bills for the execs in them and those specualting in the oil markets would go a long way to instill a reasonable and correct sense of 'national duty' in this time of war.

(Unless I've got it all wrong of course and that sense of patriotic duty is just for the poor schmucks sent off to risk life and limb in the various war zones and the rest of us just have to keep on lining the pockets of the already super-rich through ever higher oil and gas bills without jack 's' being done about it, ever, hmmmm? )

You'll probably have lower production than before.

Those other countries you mentioned have huge oil reserves but comparitively low oil production.

Private companies are just better at extracting oil.

Can anyone, ANYONE ,name a single, JUST ONE instance in which government control of commodity either increased supply or decreased its price.

Good luck.

Funny you bring that up, I was also thinking the same thing. Wouldn't that be the ultimate slap in the face for Exxon! But the damage to the economy, would be great, foreign investment would dry up. Other corporations would move their headquarters out of the US.

Remember what happend to Guatemala when Arbenz nationalized some of United Fruit Company's unused land? (1951) Or when Lybia nationalized British Petrolem (BP)? (1971)

It's just not done. I'm not sure if government inefficiency is a myth or not. I know in Canada they privatized (opposite of nationalization) Petro-Canada, years back. Do I think that was a good decision, no. Was the canadian people consulted? of course not.

Given the separate structures in existence nowadays it would probably be unrealistic to actually 'nationalise' in the sense it used to mean (and given the problems with current law and over things like compensation to shareholders etc why even bother?).

Far better would be the windfall tax route (for which perfectly normal and reasonable precedent exists), both on the utterly unearned and highly unusual profits of the oil corporations themselves and those individuals within them and the speculators within the markets grotesquely profiteering at present.

With properly international coordination we might even get a reasonable and proper democratic grip on the corporations.

There's supposed to be a war on, remember?

see i think some people have the wrong idea.

The reason to do it is not for finacial reasons. A windfall tax is the worst idea out there. In the end our american corporations are looking at uneven playing fields competing against state run oil companies around the world. We start taking away their profits and that is going to make them less competitve on the global scale.

Oil is the equivalent of prosperity and life in the modern world. If our access to it is ever cut off there are plans to go to war. Basically if the oil companies can't get their supplies, which we all need to survive, we all pay to go to war for the oil companies.

That doesn't make sense, we dont go to war with china if they dont sell fords. I think that because oil is so crucial to the american way that the protection of that resource, including transport and extration should be controlled by the government.

This would do nothing for the price, or even the supply, just would take those massive profits and have them used for reasearch for future research in alternative energy. Also every company is doing their own alternative research etc, consolodating all this and combining all that research would give the American Energy Company a huge competitve advantage on the global energy market.

once again, nothing to do with profits or the price of crude or gas. Simply that it has become so crucial to our way of life and security that it shouldn't be in private hands.

Why stop with big oil all industry is important to the American way of life, lets turn America into a Socialist country----why should Americans be better off than the rest of the world?

Confiscation of personal property----what a great idea----not----

First of all words like “windfall profits” are just sophistry, espoused by people who don’t understand economics or spreading leftist agit-prop. The ONLY meaningful measure of company’s profits is its profit MARGIN.

Exxon makes less than 9 cents of profit for every dollar of revenue. That is slightly LOWER than the industry average and LOWER than the average of all US industries. By contrast Microsoft makes over 30 cents for every dollar of revenue.

So why are their profits (as measure in raw dollars) so large? Because they sold record amounts of oil and refined products. All of those sales were to willing buyers. Would you have Exxon sell less oil and refined products?

If you reduce Exxon’s profit margin, do you think that will create an incentive to produce more gas for America? Or will they sell that gas in markets where their profit margin is larger?

Imagine I sell widgets for a dollar and make a profit of 10 cents for each one. One week I sell 100 and make $10. The next week I sell 200 and have a RECORD PROFIT of $20. I have stolen from anybody?

First of all words like “windfall profits” are just sophistry, espoused by people who don’t understand economics or spreading leftist agit-prop. The ONLY meaningful measure of company’s profits is its profit MARGIN.

Exxon makes less than 9 cents of profit for every dollar of revenue. That is slightly LOWER than the industry average and LOWER than the average of all US industries. By contrast Microsoft makes over 30 cents for every dollar of revenue.

So why are their profits (as measure in raw dollars) so large? Because they sold record amounts of oil and refined products. All of those sales were to willing buyers. Would you have Exxon sell less oil and refined products?

If you reduce Exxon’s profit margin, do you think that will create an incentive to produce more gas for America? Or will they sell that gas in markets where their profit margin is larger?

Imagine I sell widgets for a dollar and make a profit of 10 cents for each one. One week I sell 100 and make $10. The next week I sell 200 and have a RECORD PROFIT of $20. I have stolen from anybody?

You are esentially suggesting that the american people take possession of all oil companies domestic assets, and then force them to keep operating them.

Good luck, I would love to see it, but as the oil comapnies are all owned by the Vice presidents golf buddies, I dont see it happening....

Ahhh, hey Joe, the american people have asked us to steal your company out from under ya... no biggie...
Will I see ya all at the house for dinner later, the wifies making roast pig?

In a just world, we already would have grabbed those operations, and sent the officers packin...

ya well its a better deal than haveing 2300+ americans die for their companies, and billions spent by the american people to fund it, when the only plausable reason we are there is oil.

Perhaps some might consider it just bad form to point out the Mrs Thatcher's conservative government introduced a 'windfall tax' on the oil industry and the banking industry here in the UK in 1981.

There was also a windfall tax on oil and bank profits

news.bbc.co.uk...

The UK didn't turn communist, she wasn't a Marxist, the British oil industry didn't collapse, nor the British banking and insurance industry and the sky didn't fall in either.

Heck don't stop with the oil companies, let's nationalize everything, including all the assets of everyone. Then we can divy everything up equally to everyone. There is no reason to work hard to try to get ahead, or go to school for years to understand a subject thoroughly--I mean doctors make too much money let's make them treat us for free. Same for professional athletes and movie/TV stars, let's make them all perform for nothing.

we dont go to war for the right to watch movies, we dont have 2300 americans die for the yankees to play ball...

oil is the lifeblood of the country, without it absolutely nothing works. there is not 1 single product more crucial to our survival.

why should a singular product, so important be in the control of so few.

i am completely against rashoning the price, or lowering the price etc.

i just think oil's importance is tantamount to survival as an economic power.

Originally posted by jacquescas
i just think oil's importance is tantamount to survival as an economic power.

Indeed it is, because of the links between the US dollar and Oil. You see Oil is by far the most heavily traded commodity in the world. Everyone needs oil. However there are currently only 3 oil markers, all dominated in US dollar. (Other commodity markets are also mostly dominated in US Dollar)

The way the system works now, everyone needs to buy US dollar in order to buy oil on the international markets.

Iraq started selling Oil in Euro, the US intervene.
Iran wants to create a Oil Bourse, dominated in Euro, the US begins its propaganda campaign. (Uranium enrichment, nuclear programs, terrorists state, etc.)

This is why Oil is vital to the survival of a super power. - Oil backs the US dollar.

If your interested you can read and discuss about this in this thread.. I warn you this thread is a tad technical.

I created a for dummies version of the Oil-US Dollar links here.

Hope this helps.

[edit on 9/5/06 by ConspiracyNut23]

Originally posted by jacquescas
oil is the lifeblood of the country, without it absolutely nothing works. there is not 1 single product more crucial to our survival.

A nation's dependance on one sole commodity (ie: oil) to maintain daily functionality makes the infrastructure and economy extremely suceptible to price-shocks and shortages.

A 'windfall tax' as has been suggested here should be imposed on all corporate profits, and the money raised to be used as a government grant based incentive to offset the cost of development and implementation of clean-energy sources.

If you reduce the need for oil, you reduce the need to engage in conflict with other nations to maintain supply...at least until another excuse for dropping bombs is invented