Thoughts on nationalized domestic oil reserves?

**nbfan** · 08-26-2008, 03:29 PM

I know someone who's pretty up on politics and the energy crisis and such (and, for the record, he's not a fan of either candidate) and he said offshore drilling sounds like a good idea, but if we let Chevron and Exxon Mobile and the like have ownership of the oil reserves in and around the US, they'd likely charge just as much as we're getting charged right now, and will probably sell it all to China or some other foreign nation anyway, therefore making the idea rubbish. Then he pointed out Hugo Chavez of Venezuela, who had a policy of government ownership of all the oil reserves there. In Venezuela, they're paying a nickel per gallon.

Obviously this is of course a move towards big government, socialism, and all that bad stuff, but I wanted to hear thoughts on this.

JerryLove · 08-26-2008, 04:02 PM

If I understand correctly, all oil pumping requires a lease. You can't just drill because you own the land above (Perhaps that's only some areas, like off-shore?) If so, the oil is already nationalized... and rights are leased.

**nbfan** · 08-26-2008, 06:47 PM

But I mean having the government in charge of pumping it out of the ground, not an independent corporation.

JerryLove · 08-26-2008, 07:43 PM

Quote:

Originally Posted by nbfan

But I mean having the government in charge of pumping it out of the ground, not an independent corporation.

You mean: stop leasing the rights.

Bryan · 08-26-2008, 08:37 PM

Quote:

Originally Posted by nbfan

I know someone who's pretty up on politics and the energy crisis and such (and, for the record, he's not a fan of either candidate) and he said offshore drilling sounds like a good idea, but if we let Chevron and Exxon Mobile and the like have ownership of the oil reserves in and around the US, they'd likely charge just as much as we're getting charged right now, and will probably sell it all to China or some other foreign nation anyway, therefore making the idea rubbish. Then he pointed out Hugo Chavez of Venezuela, who had a policy of government ownership of all the oil reserves there. In Venezuela, they're paying a nickel per gallon.

Obviously this is of course a move towards big government, socialism, and all that bad stuff, but I wanted to hear thoughts on this.

Chevron & ExxonMobil do not set oil prices. Oil is a commodity and its price is set by the market. If we did start drilling in the US and off shore a hell of a lot more than we do now, then supply would increase and the price of oil would go down.

JerryLove · 08-27-2008, 05:26 AM

Quote:

Originally Posted by Bryan

Chevron & ExxonMobil do not set oil prices. Oil is a commodity and its price is set by the market. If we did start drilling in the US and off shore a hell of a lot more than we do now, then supply would increase and the price of oil would go down.

Supply would increase 1%-2%. It's would be pretty trivial.

Market forces, like economic growth, and driving habits (demand) as well as oil speculation (commodities market) have far more effect than such a minor increase in production would.

**nbfan** · 08-27-2008, 10:49 AM

What, outside of the conditions of conflicts in the Middle East, are affecting the 'speculation' you speak of?

JerryLove · 08-29-2008, 03:01 PM

Quote:

Originally Posted by nbfan

What, outside of the conditions of conflicts in the Middle East, are affecting the 'speculation' you speak of?

Speculators have never needed outside influences... they speculate on how future speculators will speculate (see stock market, hosing market, etc).

Speculative investors are a fickle, skittish group. They ot scared at the general stock market and started throwing their moneies into oil futures. Thanks to some Bush reworking of the commodities regulation, the oil market got flooded with non-consumers (speculators).