Is It Time To Nationalize Oil


I paid $4.00 per gallon this morning to fill up my car in Shepherdstown, West Virginia. Yikes. Despite the expected Republican -- who-cares-about-the-truth -- talking points, the recent price hikes in oil and gas have nothing to do with President Obama. They are the consequence of world crude oil prices -- which will not be improved by  reliance on  domestic oil. The much ballyhooed increases in domestic oil production that began under Bush and have been accelerated since Obama came to office have had virtually no effect on prices because since US oil reserves are only 2% of the world known reserves (while we consume over 25% of oil production).

Like me, millions of Americans take immediate and sharp notice of gas prices since, due to the paucity of public transport in the country, there is no other way except the internal combustion  automobile to get to work, get the kids, get the groceries, get supplies -- in other words -- to live! Now -- that is not exactly true in the scientific or technical sense since -- as my truck driving neighbor can demonstrate --  its been possible for 60 years to build a car that gets 60 miles per gallon of diesel fuel and lasts for 20 years. But -- the business model of auto corporations won't allow that: they can't maximize profits unless they produce "durable" goods that fall apart in 5 years, or less.

One thing is for sure -- all kinds of folks who normally do not like to think AT ALL about politics get very political when gas rises. It is, of course, the equivalent of a direct pay cut, and there is nothing like a pay cut to make you want to find out who to blame! 

So why are world crude oil prices rising? Because  1) (long term) demand is rising faster than supply; and 2) (short term) the conflict with and sanctions on Iran -- the worlds second biggest supplier of the highest grade oil --- are stimulating market speculation and hedging. Long term, there is no solution to the rising cost of oil. National energy and transportation and research policy thus must more aggressively develop alternatives, as well as green economic development programs that sharply reduce wasteful and inefficient consumption.  Short term, lowering the temperature in the Middle East would provide some relief. But the disaster of Iraq (still not returned to its pre-war levels of production), the utter failure to resolve the Israeli-Palestinian crisis, and the confrontational policy towards Iran -- all make this a very difficult challenge. 

A big -- perhaps the biggest -- factor blocking both long and short term progress is the oil lobby -- Exxon, BP, Chevron, Koch Industries, etc -- who are spending millions upon millions to obstruct any loss of privilege and power, and to divert any energy diversification efforts away from initiatives not solely under their private control. In the last presidential cycle the oil and gas industries (not counting coal and nuclear power) spent 212 million on contributions and lobbying efforts (according to Open Secrets) and promise to spend even more in the current cycle, 90% going to Republicans.

I do not know if outright nationalization of the oil industry giants is the exact correct course -- but bringing their actions under strict public control -- like almost all states have done with public utilities -- is an absolute necessity. This includes outlawing their criminal -- in my view -- political corruption program.

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  • Yes it is time to nationalize big oil - but I think a demand for strict controls would get a bigger support base and help clarify the issues. It has to be combined with a program to drastically reduce oil usage that doesn't make working people suffer. LIke public transport. I just don't see how we can keep dumping the results of oil usage in our atmosphere and survive the resultant cliimate catastrophe.

    Posted by , 03/14/2012 12:31pm (7 years ago)

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