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 -- not reliance on foreign 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 U.S. oil reserves are only two percent of the world's known reserves (while we consume over 25 percent 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 five 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.) demand is rising faster than supply; and 2.) the conflict with (and sanctions on) Iran -- the worlds second biggest supplier of highest grade oil is stimulating market speculation and hedging. Long-term, there is no solution to the rising cost of oil.

National energy and transportation policy 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, 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, 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 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.

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 included outlawing their criminal -- in my view -- political corruption on the political process. In other words, the ability of today's oil barons to buy their way through Congress.

Post your comment

Comments are moderated. See guidelines here.


  • I am a petroleum geologist in Kansas, where almost all oil companies are small, family, and honest. The major companies left years ago. The reason USA is so efficient in oil exploration is just this: thousands of enterprising, competing small independent companies and private ownership of mineral interests mostly by private farmers and ranchers. But the major international oil companies and too many very wealthy promoters pollute our industry with their political money and fraud. The solution is not nationalization but prison sentences for those who break the law.

    Posted by Alfred James, 06/28/2015 8:09pm (2 months ago)

  • There is a much better way of managing Oil industry and Gasoline consumption in general:

    1) Oil companies should be nationalized and new oil field should be developed ASAP.
    2) New Oil pipeline should be built quickly.
    3) "Cash for Clunkers" program should be made permanent to further lower domestic consumption.
    4) Government program should force and/or subsidize trucks and other heavy vehicle conversion to Natural Gas.

    Once there is a surplus of Oil we can focus on paying off national debt from the excess revenue derived from Oil.

    Posted by Bob Kebic, 02/02/2013 10:52pm (3 years ago)

  • Another reason for the rise in gasoline prices is the closing of oil refineries, squeezing the supply of gasoline. Three refineries recently closed in Philadelphia, making many workers unemployed. Another big one recently closed in the Virgin Islands.

    Posted by Peter Gale, 03/14/2012 10:35am (3 years ago)

  • Hi, You don't mention Congress passing strong laws to stop speculators etc. And the use of diesel fuel as an example of fuel economy-not good! If you think the oil industry needs to be nationalized-say so. I'm disappointed that I have to read this disconnect article out of People's World. Peace, gcb

    Posted by chris bannon, 03/13/2012 6:17pm (3 years ago)

  • President Carter set up an organization to end our dependency on foreign oil and through Republican and Democratic Administrations we are just as bad off to day with no end in sight.
    It is not President Obama's fault. It existed before he was born. While I hesitate to demand Nationalization I feel those in charge of the Energy Department have failed in their responsibility .
    If our Engineers can create Atomic Energy I am sure they can find a way to better use our resources as well as an alternative to a gasoline engine.

    Posted by RiverRat, 03/13/2012 3:31pm (3 years ago)

  • We're a long way from nationalizing oil. The first this you have to understand about any solution is how to create the political environment to achieve it. In order to nationalize oil, you would not only need a strong Democratic majority in both houses of Congress, the courts, etc.., but you would have to have an almost complete consensus among the vocal population, including and especially the media. Otherwise they'll just scream socialism.

    Our political environment is a little tricky and needs a lot of serious work before we're ever going to achieve anything like nationalizing a resource.

    Our Democracy is riddled with propaganda and corruption and about half populated by people who eagerly buy into both. The economy for example is a political weapon. Thus, high gas prices despite production and supplies being up and demand being down. Think sanctions. Speculation in the financial news is what drives the markets. The speculative trader is simply a tool, one that the GOP has worked very hard to keep in place.

    The GOP's propaganda machine uses prejudice and stereo types to demonize the left. The party uses lower taxes to de-fund social programs and create debt and de-regulation to arm their economic allies. When a Democrat is elected, the financial news turns sour and speculation focuses on pushing economic keys down to suppress the economy, thus discrediting the economic policies of the newly elected administration.

    Nationalizing our oil seems like a great plan, but I think we've got a few more fish to fry before we're ready for that one. I am optimistic though. Although the game is very old, comment sections are kinda new. I say give the people a chance. I think we'll get this under control. The dissemination of knowledge is the key.

    Posted by James Hovland, 03/12/2012 5:29pm (3 years ago)

  • Take into account that the US government makes about twice what the oil companies do in actual profit with their 15% tax on gasoline.

    Posted by , 03/12/2012 5:25pm (3 years ago)

RSS feed for comments on this page | RSS feed for all comments