Is it time to NATIONALIZE the ENERGY industries

[The Sushi Bandit]

Tired of getting gouged and see all the profits going to the BushCo's?

Natural Gas, Electric, & Oil PLUS the brookers and distributers??

Oh and the transmission lines too!

[Deja Q]

1. How? Those in power want to privatize it all... Just think:

Enron Natural Gas
Enron Electric
Enron Oil

[newswolf56]

2. Not to mention Enron Health Care.

[ExclamationPoint]

3. I've got a marvelous idea!

How about we stop using oil altogether so we can possibly avoid more global warming and yet another level 5 hurricane! :o

[EST]

4. Reregulation would make a huge difference,

but would not seem to be a big enough cudgel to create the needed results.

[Tace]

5. I'll Suggest Not Nationalizing -- But Effectively Regulating -- Big Biz

I'll admit, it's the libertarian in me. Notice that's a little "l."

[julianer]

39. And ten years down the line there

will be another group of legislators willing to be bribed into de-regulating, or to propose 'self-regulation' for reasons of 'efficiency'. You know the story.

[LiberalEsto]

6. When I visited Italy in 1980

they had certain industries that were nationalized. Butter, tobacco, and I forget what else, but at least a couple of others. All profits from these industries went to guarantee old age pensions for every citizen, or to subsidize the rail transit system.

So people knew that if they consumed certain products, they were contributing to their retirements and/or cheap transportation. I thought it was a wonderful system.

[WillyT]

11. I Like That...

I really don't care what kind of profit margins a company makes off of, say... a Brittany Spears CD, but some basic needs should be either non-profit, or minimal profit.

Hell, even the makers of the game of Monopoly got that one. The railroads and utilities (in the game example) were good steady investments, but without the gouging for profits that occurred when you landed on Park Place brandishing a hotel.

:shrug:

[The Sushi Bandit]

30. I like that!!

[wuushew]

7. Generating and supplying energy is an engineering problem

as such there are clearly more efficient means and scales of production than are possible by duplication of production and entrepreneurial waste.

[tx_dem41]

8. If we did, we would certainly find out just how expensive gas is right...

now. And we would be slaves to the government. THIS government.

[htuttle]

10. Given the choice between being "slaves to a government"...

...or being a "slave" to a corporation, to be honest I think I'd go with the government. At least at the current time, there are at least a few levers remaining for democratic influence on the government. There's absolutely NO such influence on a corporation.

In theory, at least, government should, well, "establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity". Sure, just words nowdays, but it's a hell of a lot better language than you'll find in a corporate charter.

[tx_dem41]

21. One makes themselves "slaves to a corporation". You have ..

choices not to be....these choices are provided by the free market system.

[DemocratSinceBirth]

9. Why Do People Ignore The Fact That The Cost Of

gas is a function of the price of oil which we have little control over....

The laws of supply and demand are one thing that economists of all ideological stripes agree upon...


If OPEC and other oil producing nations decided to sell their oil for $100.00 a barrel that would be the price....


And even if we subsidized the price of gas we would use more of it further pushing up the price of oil....

[Old and In the Way]

15. Subsidize? We spend $400BB/year subsidizing oil

It's called "National Defense". Our national energy policy is pure politics. If we actually had classical supply/demand laws ar work on oil, we'd be funding cheaper alternatives to SA oil @ < $40.00/bbl. Check out what the Montanna governer is doing on a technology to extract energy from coal. He believes that it is economical @ $30.00/bbl for foreign imports.

[etherealtruth]

17. We sure do (subsidize) ...

This is why we have paid artificially low prices at the pump for years.

[DemocratSinceBirth]

19. I Am All For Alternatives To Fossil Fuel...

My only point is we don't determine the price of oil....

[Old and In the Way]

26. Who determines it?

Big Oil and OPEC do. Actually, I think the day is fast approaching where true supply/demand pricing will finally be realized. That's because when the point where demand meets supply, they'll be no more elasticity in the pricing. It's always been a balance between maximizing profits while increasing supply to match demand, but those days may be coming to an end. Then the laws of supply and demand will take over...and then we can finally start to justify alternative energy sources because the market pricing will follow the demand curve.

[Salviati]

12. Energy, health, and 'Defense'

Anything that is vital to the healthy and secure functioning of society should be either nationalized or regulated to the point that it might as well be nationalized.

[me b zola]

28. That is exactly how I look at it

Any industry or function that is crucial to the infrastructure should be nationalized. The transportation systems that can't function without the occasional multi-billion dollar check from the treasury should be nationalized as well.

[eallen]

13. I know facts aren't that important to a utopian plan....

Nonetheless, there are a few facts to keep in mind.

(1) The US imports most of its oil. Without some serious foreign policy consequences, it cannot nationalize Royal Dutch Shell, British Petroleum, PetroKazakhstan (a Canadian oil company now owned by a Chinese oil company), or Saudi Arabia.

(2) Nothing is going to reverse the decline of US oil production. It peaked in 1970, just as Hubbert predicted.

(3) Oil is a fungible commodity that trades in a global market. The US nationalizing either its energy companies or its own petroleum resources will not lower the price of oil. If anything, it likely would raise it. If you want the US government to do something that gets US consumers cheaper oil, I'd recommend some kind of foreign conquest of an oil exporting nation, so we can get their oil at below market prices. Bush seems to have his eye on Iran, anyway. That kind of adventure doesn't always work out. But it makes more sense than nationalizing the oil industry here.

(4) The price of gasoline in the US has two main components: the price of crude oil, and the road fees levied on gasoline. Yeah, the refineries make out like bandits when the prices rises. But their profit still is pennies on the gallon. Of course, if your goal isn't really to get consumers cheaper product, but just to satisfy some urge to nationalize, have at it.

[TahitiNut]

20. How much does it cost to produce a barrel of Light Texas Crude?

How much does it sell for? :eyes: :eyes:

Repeat for Gulf Crude, Alaska Crude, etc. :shrug:

[DemocratSinceBirth]

22. Oil Is Fungible...

Once it comes on the market it doesn't matter where it comes from....

We produce a small fraction of the world's oil and import almost seventy percent of the oil we use....



http://www.americanvoice2004.org/factoids/

Ratio of barrels of oil produced in US per day to barrels consumed in US per day during the Yom Kippur War of 1973: 1 to 1.3
Ratio of barrels of oil produced in US per day to barrels consumed in US per day during the first Gulf War of 1991: 1 to 2.3
Ratio of barrels of oil produced in US per day to barrels consumed in US per day during the second Gulf War in 2003: 1 to 3.7

[TahitiNut]

24. Therein lies the fallacy of the ANWR drilling proponents.

Every time some yahoo screams about "reducing US dependency" by drilling for more, they ignore the fact that it's (currently) a global market.

Nonetheless, that doesn't answer the question or get to its heart. The fact of the matter is that producing wells continue to produce at the same cost, even when the market price goes up. Thus, existing sources of crude become more and more profitable. The tired old "free market" arguments legitimizing profits just don't hold when it comes to oil, however, since there is no free entry to the marketplace as a supplier. Without that, it's not a free market. It's a cartel. Most of the world's supply of oil is state-held for private profit - not really "nationalized" - more like fascistized. The U.S. should nationalize these industries if only to stop the privateering -- redirecting the profits into national revenues. There is no longer any legitimacy to the privatization of a market that's not free and open to new competition as demand exceeds supply.

[DemocratSinceBirth]

25. ANWR Is A Joke...

The amount of oil it will produce compared to our needs is miniscule...

[eallen]

23. Are you eager to get rich? Want to put money into wells being drilled?

I can put you in touch with some exploration companies working in Texas. You can get into some of their projects for as little as a four or five thousand a unit. Once the well is drilled, it often costs very little to produce. And it costs even less when the well doesn't produce. If you think it is easy money, there are a many projects to try your hand.

Now yeah, if you nationalize every well in US jurisdiction, the government could sell that oil for whatever price it wants. I can think of only three problems with that. First, we'd still have to import most of our oil at market prices. Second, the current owners of those wells would bitch like hell. They likely would go to court, where their lawyers would point to clauses in the Constitution about "due process" and "just compensation." Third, every ongoing piece of exploration and development would grind to a halt. A set of producing wells produces less and less every year. Some run dry. Others just run slow. The only way to maintain production is to go out and drill new ones. I guess you could nationalize that process also. If you find a Ghawar, it all will work out fine.

[julianer]

40. Your points are all

very valid within the currently existing framework and it may well continue to work well right up to the day where climate change puts a stop to the market.

The point is that if we let things carry on as they are there is no real future for humanity or many other species. The market can only really decide the speed at which we hurtle toward destruction.

If we are going to avoid the end of our species we must become a little more serious about our current actions and dare to think that what currently exists isn't necessarily the best.

[wuushew]

27. Record cash dividends represent a misallocation of wealth

socialized industustries are not obligated to waste money buying back stock or paying dividends. All wealth not recognized through wages is economy slavery and will eventually concentrate wealth in very few hands. The idea that owning stock rewards people for taking risks regarding future earnings will be demolished when industrialized society eventually transitions to a steady-state paradigm least be the victim of demographic and energy supply collapse.

Big Oil's Burden of Too Much Cash

Born from the megamergers of the 1990's, the world's giant oil companies have delivered on their promise. They have cut costs, increased returns and raised profits to records. Now, flush with cash, they find themselves in a paradoxical position - they are making more money than they can comfortably spend.

Thanks to crude prices that averaged $41 a barrel in New York last year, the world's 10 biggest oil companies earned more than $100 billion in 2004, a windfall greater than the economic output of Malaysia. Together, their sales are expected to exceed $1 trillion for 2004, which is more than Canada's gross domestic product.

But even as fears of shortages grow throughout the world and prices remain high, the cash-rich oil companies are not pouring a large portion of their money into their basic business: drilling for oil. Indeed, oil executives, in their second straight year of rising profits, are finding that too much money is chasing too few oil fields. Instead, they are giving much of their cash back to shareholders

http://www.energybulletin.net/4318.html

[catnhatnh]

14. Life may play into it....

when the elderly begin to freeze to death this winter... though those dying of prescription pill apnea will not be counted...liberty is not involved. But "pursuit of happiness" has the commie connotations that AUGHT to scare the shit out of the right wing....If I or my elderly parents must freeze in our houses, or go without prescribed medications for financial reasons, are we not DENIED "pursuit of happiness"???While my Dad sinks further into Alzheimer's denied the kind of response given to Ronald Reagan, (multiple physicians and best clinical treatment).When YOU start demanding what THEY get,this house of cards will begin to drop...

[La Coliniere]

16. It's about time!

[TahitiNut]

18. Yep. And 'compensate' stockholders' at the book value of the assets.

Screw the evil fiction of "market price." Just make a deposit of funds equal to the book value of the tangible assets of the company and assigne "ownership" of that deposit to the stockholders.

:evilgrin:

[delete_bush]

29. this is new to me, what is the evil fiction of market price?

Many tangible assets have a real value that can vary significantly from book value. Sometimes more, sometimes less.

[TahitiNut]

33. I propose that when a public company is nationalized ...

... that it be done so by paying book value. The irony in that is that book value is the legal fiction used for most tax purposes. (In other words, it's what the company tells the public/government it's worth in tangible terms.) When I speak of the 'fiction' of market price, it's in reference to the stock (equities) market, where all the stock is "valued" (market capitalization) at the price paid for the last trade. That (last trade) price is set more by Greater Fool dynamics (including the artificial 'demand' driven by vast pension funds) than intrinsic value. (If all owners tried to sell at that price, they'd fail to find buyers.) In mergers, the 'market capitalization' in excess of book values is put on the balance sheet as "goodwill" - an intangible (so-called) asset. That's amortized on the backs of labor, not owners.

[delete_bush]

36. Several points....

(1) In order to tax (for example) corporations, there has to be a standard for determining legitimate business expense. Tax laws provide for depreciating/amortizing acquired assets at cost over a period of time which approximates their useful life. Unless you propose that capital expenses be allowed to be expensed 100% in the year of acquisition, this is a fair approach. It makes no sense to arbitrarily revalue assets annually given that any gain or loss is ultimately resolved upon the sale/disposition of the asset anyway.

(2) I don’t believe the ‘Greater Fool’ theory applies to most stock trades. Certainly during the dot.com era when everyone was searching for the next Microsoft et al, but for the most part stock values are based on anticipated future earnings i.e. stock multiples. There is a lot of money out there chasing stocks/bonds/real estate but that is more a function of supply/demand looking for the best ROI.

(3) “If all owners tried to sell at that price, they'd fail to find buyers” of course is true but the same could be said for a run on the banks devaluing the dollar. Or chaos promulgated by war.

(4) I have no clue as to what you mean by amortizing goodwill on the backs of labor.

(5) The current stock price of Chevron, for example, is around $60/share. As of 12-31-2004 they had 2,083 million shares outstanding, with equity of $48.5 billion or $23/share book value. Notwithstanding the fact that this whole notion of nationalizing publicly traded stocks in the U.S. is preposterous and will never happen, how does one explain to retirees and investors (many of whom are foreign) that you are going to give them $.39 on the dollar for their investment? The old "trust me, I'm with the government" routine?

[TahitiNut]

37. While I'm not an accountant or CPA, I was an internal auditor.

Although my focus was operational analysis and systems (manual and computerized), I once had a pretty firm grasp of the basics. This was in two Fortune 100 companies. So, to be brief ...

(1) Depreciation is theoretically intended to refect the useful life of a productive asset and the reduction of the useful life over a production (i.e. accountable) period. Associated accounting artifices were designed for (a) simplification and (b) economic stimulus. The tax ramifications are, assuming an eventual capital gain taxed at some equitable rate, essentially the public loaning money to business, interest-free.

(2) I do. The phrase "anticipated future earnings" speaks to the productivity of the work force. When P/E's are at 25, 30, and above, that means off-shoring and longer whips. It's the kind of inflation that's even worse than CPI. I think the article at http://www.harpers.org/The4.7TrillionPyramid.html pretty well sums up my attitudes.

(3) That still leaves open the question of equity valuation in the vent of an Eminent Domain takeover. I'm sure the owners of the homes in New London regarded their value at more than they were "offered."

(4) The "goodwill" asset has some arcane accounting rules, but it's my understanding that it must be written off in 5(?) years. Merged companies are notorious for huge layoffs and pension liquidations.

(5) Yeah. And I guess all the slave-holders in 1865 should've been paid off at full value, too. Oh... and $0.39 on the dollar is better than what the Enron retirees got.

[rhite5]

31. Regional PUBLIC power districts is the right way to go for electric power

Remember this: Electric power is ALWAYS a monopoly in the region it serves. There is NO competition. Therefore, the corporate model does not fit. Using a corporate model (where the whole purpose is to make high profits for the shareholders and there is no competition) requires a lot regulations and a lot of government bureaucracy to keep it honestly serving its customers.

Many areas in this country are served by public power districts. The key word is PUBLIC. That means they are owned by the public, but NOT the NATIONAL government, and of course they are not owned by corporations. Some of these serve cities and are owned by the cities and are called Municipal Power Districts. Other public power districts serve small and large rural areas which often include several small towns.

Public power districts have Boards of Directors elected by the customers. Each director represents a different zone in the district. The Board selects the people that get hired to manage the district. The point is that customers have a direct link to the workings of the business. They can attend board meetings and participate, even introduce agenda items.

This is the way to go. It is quite different from Nationalizing electric power. A regional district can make its own decisions about developing alternative energy for instance. It does not have to wait for the whole nation to decide it is ok to do that. And it does not have to have a huge bureaucracy full of political appointees to run it.

There is a lot to be learned about public power districts. How they get formed, how they can acquire the existing infrastructure from the corporate entities, how they buy, sell, and trade power resources and also generate some or all of their own power. They of course are also subject to State Regulatory agencies. Their profits are severely limited by law. So there is a high incentive to "reinvest" in keeping the infrastructure upgraded and functioning well and developing more sources of power, some of which can be sold to other power companies. This non-profit requirement keeps their rates to the customers lower than the corporate power companies.

There are many models to look at, both in this country and especially overseas in the UK and in some of the European countries.

There is no reason for electric power to be all tied together in a national grid anyway. A national grid makes it far too easy to knock out the power all across the country (by accident or by design). We don't want that vulnerability. But that is really another subject, just kinda related.

[delete_bush]

34. This is the only aspect of government/public ownership

that I agree with, and for the basic underlying reasons you've stated.

I’m in favor of fed or state subsidies for local electric utilities exploring wind or solar generation on a large scale. It is not consistent with corporate short/medium term goals to "experiment" with some of the new technology out there so this will not happen as long as they are exert control of our energy policy.

As an example, when I read about the Solar Tower project in Australia it pisses me off that we won't take a billion or so from the Iraq war and try this. If nothing else it would provide good jobs for Americans for several years and on paper it seems to work fine. I haven't seen anything negative about this particular idea, but if so then try something else.

Perhaps my memory of public utility companies of an earlier era is faulty but it seems to me at one time they were highly regulated bodies where some mega-CEO who was an active member of the community could make a good living but not several hundred million from stock options by screwing his own customers. Utilities were boring, safe investments that paid dividends to the coupon clippers while making prudent energy choices that were of local benefit.

[rhite5]

35. If you remember "coupon clippers" those were corporations, not public...

utilities.

The message I am trying to get across is to keep them both public AND localized (or at least regionalized) and not NATIONAL.

There are two general goals I think in progressivism. (1)Cut down on corporate size and power; (2)Cut down on the size and power of the Federal government.

The Electric Utility industry is a good place to start, because the models are there both here and abroad. All it takes is citizen activism to get the ball rolling to get more of them. Consumer education is the first essential step.

[The Sushi Bandit]

32. 93 votes so far...just need a few votes for "greatest" too!

[The Sushi Bandit]

38. .

[The Sushi Bandit]

41. My bad...hit the wrong key!

[DiverDave]

42. ENERGY, PHARMA , INSURANCE

ALL of them.

These 3 industries are the biggest gougers to the average joe.

[Douglas Carpenter]

43. recommended---The energy and health industry are just too powerful

And the power is held by power who have continually betrayed their public trust. It is probably not politically feasible right and moment. But the mere threat of nationalization is very important.