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I explained in the OP why bailouts/ nationalization is not a solution. Plus, governments have a tendency to mismanage things.
There's a concept called EROEI (energy returned on energy invested, ie how many barrels of oil you receive for every barrel of oil you put into production). Shale oil has a very poor EROEI. In the early days of US oil production, the EROEI was very high. An oil rig in 1930s Texas would produce 100 barrels of oil for every 1 barrel of oil invested, and would remain productive for decades. With shale oil, the EROEI is something like 5 to 1. And the wells have a horrific depletion rate. So constant drilling is required. That's why it will never be profitable.
Thus USA does not have the raw materials to compete with likes of OPEC etc etc. That is where nationalization can come in. The Govt will produce the petroleum using our inferior raw material. Buy less of foreign oil while subsisting on our own supply until price becomes better.
The Govt does not need to worry about maximizing profit. They can treat any program like SS, Medicaid, etc etc. Govt just have to print money out/ create electronically to pay the drillers, engineers, rustabouts, and admins. Is probably a better utilization of whatever the finance people call it: QE, or something, then giving to bankers who either sit on it, or enrich themselves without any benefit to society. The money will trickle down to more and faster that way.
Quote:
Originally Posted by recycled
That was Hugo Chavez' idea behind nationalizing all the Venezuela oil production and wrapping it up into PDVSA. PDVSA made a nice profit for a few years, but the problem is, the Chavez (and later Maduro) government used PDVSA as a cash cow for paying for a bunch of great social programs in order to boost popular support for socialism. They bled PDVSA dry, and investments in maintenance and upgrades to refineries, pipelines and drilling operations dropped to bare minimum levels. Oil production in Venezuela has dropped from 3M to well below 1M BPD. It has not been a great success story.
But the OPEC nations are doing fine, relatively speaking, with their national oil industry. Venezuela supposedly has worlds largest crude reserves. If USA shale continue down path describe in OP, and or if other nations experience same, then Venezuela have an advantage again.
Thus USA does not have the raw materials to compete with likes of OPEC etc etc. That is where nationalization can come in. The Govt will produce the petroleum using our inferior raw material. Buy less of foreign oil while subsisting on our own supply until price becomes better.
The Govt does not need to worry about maximizing profit. They can treat any program like SS, Medicaid, etc etc. Govt just have to print money out/ create electronically to pay the drillers, engineers, rustabouts, and admins. Is probably a better utilization of whatever the finance people call it: QE, or something, then giving to bankers who either sit on it, or enrich themselves without any benefit to society. The money will trickle down to more and faster that way.
But the OPEC nations are doing fine, relatively speaking, with their national oil industry. Venezuela supposedly has worlds largest crude reserves. If USA shale continue down path describe in OP, and or if other nations experience same, then Venezuela have an advantage again.
The US government has a poor history of operating oil properties. The government owned the Elk Hills field West of Bakersfield, with Bechtel as the contract operator. It literally took an Act of Congress to set the budget and fund the operations. The field was occasionally shut in waiting for an appropriation to spend money for maintenance or urgent repairs.
The US can't really subsist on the oil produced here without shale going full blast. despite the plaintive mewlings of AOC and others, oil is here to stay for a while. There will be no replacement of oil and the end of fossil fuel by 2030. Not happening, not technically possible.
You're not replacing the installed base of combustion engine automobiles fast enough. Even when everyone was buying gasoline-powered cars, it was taking 15-20 years to replace all the cars, trucks, and buses. Electric vehicles are nowhere close the sellers.
There is nowhere near enough capacity to build enough electric vehicles to replace ICE vehicles. There is also the problem of having enough electrical generation capacity to recharge all of the batteries.
And the big $64,000 question for people who are so gung ho on electric cars - guess what is the main source of electricity? (Hint - it's not solar or wind power.)
Sixty five percent of fuel to create electricity comes from coal, natural gas, and oil. Thirteen percent comes from wind, solar, and hydro power. Nuclear is 20 percent.
And the big $64,000 question for people who are so gung ho on electric cars - guess what is the main source of electricity? (Hint - it's not solar or wind power.)
Sixty five percent of fuel to create electricity comes from coal, natural gas, and oil. Thirteen percent comes from wind, solar, and hydro power. Nuclear is 20 percent.
There's this pervasive superstition that we can hi-tech our way out of our energy predicament. We cannot. Electric vehicles are yet another hi-tech boondoggle that will end in a river of tears.
And to add, solar and wind power may be 'renewable', but wind turbines and solar panels are not.
The US government has a poor history of operating oil properties. The government owned the Elk Hills field West of Bakersfield, with Bechtel as the contract operator. It literally took an Act of Congress to set the budget and fund the operations. The field was occasionally shut in waiting for an appropriation to spend money for maintenance or urgent repairs.
The US can't really subsist on the oil produced here without shale going full blast. despite the plaintive mewlings of AOC and others, oil is here to stay for a while. There will be no replacement of oil and the end of fossil fuel by 2030. Not happening, not technically possible.
Well if we dont have the raw materials to become fossil fuel self sufficient, then we dont. So either we move away from that strategy, or what I suggest. There really arent anymore options. If a business cannot support itself, it should fail and go away. But if need products or services still necessary then govt must take it over. Either that or give welfare to private businesses, which means businessmen/owners will be making money, when they cant even run a successful business. That we cannot have.
Well if we dont have the raw materials to become fossil fuel self sufficient, then we dont. So either we move away from that strategy, or what I suggest. There really arent anymore options. If a business cannot support itself, it should fail and go away. But if need products or services still necessary then govt must take it over. Either that or give welfare to private businesses, which means businessmen/owners will be making money, when they cant even run a successful business. That we cannot have.
We don't need to be fossil fuel self sufficient, since there is plenty of oil available around the world that can be produced at lower prices than what's required here to break even. Lots of oil companies, especially smaller ones will fail. So be it. Nationalizing the oil business in the US would be a really bad idea. It's not like the government can make oil economic when businesses failed to do so.
We don't need to be fossil fuel self sufficient, since there is plenty of oil available around the world that can be produced at lower prices than what's required here to break even. Lots of oil companies, especially smaller ones will fail. So be it. Nationalizing the oil business in the US would be a really bad idea. It's not like the government can make oil economic when businesses failed to do so.
Govt does not need to make it economic. Look at what they have done with the MIC, and war on terror. Or even with the national debt. They just keep running it up.
They can just keep running it up. If you have that ability, then surely you can nationalize some business niche that is not profitable.
Yet as I stated before, either you do this, or you completely forget about the dream of fossil fuel self sufficiency.
Yet as I stated before, either you do this, or you completely forget about the dream of fossil fuel self sufficiency.
Ding, Ding. We have a winner.
Head off Oil and US comes out WAY ahead.
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