U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Politics and Other Controversies
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 07-15-2007, 11:01 AM
 
Location: Sacramento
13,947 posts, read 25,300,272 times
Reputation: 6828

Advertisements

A major story that has been underreported by our media is the nationalization of the oil and natural gas production industries by two of the largest non-middle east producers, Venezuela and Russia:

Moderator cut: copyright

Last edited by Marka; 12-19-2007 at 03:17 AM..
Rate this post positively Reply With Quote Quick reply to this message

 
Old 07-15-2007, 08:18 PM
 
4,406 posts, read 5,807,363 times
Reputation: 2903
Can you delineate what you find so disturbing in this trend towards nationalizing energy? Is it just that it smacks of socialism or is there some underlying threat I'm not aware of?
Rate this post positively Reply With Quote Quick reply to this message
 
Old 07-15-2007, 09:51 PM
 
Location: Sacramento
13,947 posts, read 25,300,272 times
Reputation: 6828
It has to do with the lack of appropriate evaluation of asset valuation. If the national Govts wanted to form a "company" that competed with others to "buy" the operation, then I wouldn't be so concerned. Russia is a major supplier to Europe, and the long term political ramifications, such as coercing Britain not to continue to pursue the poisoning of former agents becomes a potential issue. Russia and Venezuela are not paying market rates to take over the operations, they are basically declaring a value and forcing the sales.

This could also result in some long term supply and pricing problems if we don't expedite developing alternatives to purchasing fuel from both countries. Current competition may not be optimal, but this is going to further limit the possibilities of future competition, and flies in the face of the economic revolution in Russia. Russia has also very aggressively arrested many of their early entrepreneurs, and not brought them to fair and open trials.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 07-15-2007, 10:10 PM
 
Location: Warwick, NY
1,173 posts, read 5,699,220 times
Reputation: 1019
Quote:
Originally Posted by NewToCA View Post
It has to do with the lack of appropriate evaluation of asset valuation. If the national Govts wanted to form a "company" that competed with others to "buy" the operation, then I wouldn't be so concerned. Russia is a major supplier to Europe, and the long term political ramifications, such as coercing Britain not to continue to pursue the poisoning of former agents becomes a potential issue. Russia and Venezuela are not paying market rates to take over the operations, they are basically declaring a value and forcing the sales.
A prime example of why things like diplomacy and negotiations and policies and alliances are particularly important to a government with global security and economic interests.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 07-15-2007, 10:16 PM
 
Location: northern big wonderfull (Wyoming)
150 posts, read 497,773 times
Reputation: 63
the situatin will get worse before it gets better if ony beacaus of the strong global market.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 07-15-2007, 11:10 PM
 
9,722 posts, read 14,193,681 times
Reputation: 3345
Not only is there a strong global market for energy, our dollar (the "petrodollar") is very weak. Just last week, Iran told Japan that they want them to start paying for oil in Japanese Yen. If the dollar falls out of favor as a method of payment, it will mean problems for the USA.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 07-16-2007, 01:02 AM
 
Location: Warwick, NY
1,173 posts, read 5,699,220 times
Reputation: 1019
Quote:
Originally Posted by UB50 View Post
Not only is there a strong global market for energy, our dollar (the "petrodollar") is very weak. Just last week, Iran told Japan that they want them to start paying for oil in Japanese Yen. If the dollar falls out of favor as a method of payment, it will mean problems for the USA.
Without the petrodollar there is no reason to buy our securities when others will hold their value better. This is the same thing Russia is trying to do by opening its own oil bourse. Norway open its own in Euros too. Things getting tetchy here.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 07-16-2007, 02:00 AM
sun
 
Location: Central Connecticut
683 posts, read 2,036,313 times
Reputation: 448
None of this bothers me. I think that it happens both ways often enough. Here we have eminant domain, where landowners have their land taken from them for "public use", except that definition has been expanded to include private development by the U.S. Supreme Court recently (when Sandra Day O'Connor dissented).
Also, look at Iraq where the French and maybe even the Russians had long term oil contracts with Saddam that we interfered with when we invaded.
Now we have a right to complain?
Since something can always be nationalized in a foreign country, the investment has enormous risks from the onset. Circumstances and elections for instance, can change the terms of a deal overnight. Even something as benign as an earthquake can cause a loss of an investment. So, it's hard to fault any sovereign country for exercising its national interest.
Venezuela is giving oil away below cost to the poor in this country through the younger Kennedy's Oil Program.
Russia is a country with financial hardships and is struggling to obtain foreign money through exports. They only seem to be demanding a majority holding in the project. Are we not partners with Russia in other projects including the Space Station? Our oil companies have excess profits and minimal taxation, so why doesn't BP build some new refineries here at home and alleviate some U.S. refining capacity problems?
Rate this post positively Reply With Quote Quick reply to this message
 
Old 07-16-2007, 06:54 AM
 
2,356 posts, read 3,037,518 times
Reputation: 864
Quote:
Originally Posted by sun View Post
Our oil companies have excess profits and minimal taxation, so why doesn't BP build some new refineries here at home and alleviate some U.S. refining capacity problems?
The rationale that I've heard is that opening new refineries is too risky for oil companies. Supposedly, it takes 20+ years to cover the cost of building a new refinery. It makes sense that the oil companies don't want to assume that oil demand will still be high in 20 years.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 07-16-2007, 06:58 AM
 
2,356 posts, read 3,037,518 times
Reputation: 864
Quote:
Originally Posted by NewToCA View Post
I find these actions exceptionally disturbing, and hope the US takes action to quickly reduce the dependency rewarding these despicable actions. I would like to see both countries take a financial bath internationally, sending a message that this type of behavior will not be tolerated whatsoever.
I agree.

What actions do you have in mind, though? What could we do, and do we want to worsen US-Russian relations?
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Politics and Other Controversies
Similar Threads

All times are GMT -6.

© 2005-2021, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top