Hugo Chavez likes Nationalized Oil… so do Canadians

Huh?

Well… a little while ago I mentioned that Chavez has been making offers to export his countries oil to everyone but the US. Asia, Europe, South America, and his neighbours in Central America and the Caribeaan.

Today, he took one more step towards creating a “Petrocaribe”.

The talks are being attended by representatives of Antigua and Barbuda, the Bahamas, Belize, Cuba, Dominica, the Dominican Republic, Grenada, Guyana, Jamaica, Surinam, St Lucia, St Kitts and Nevis and St Vincent and the Grenadines.

Mr Chavez announced the Petrocaribe plan in June at a regional summit in Venezuela’s city of Puerto La Cruz.

He said the region had suffered centuries of imperialism and needed to strike out on its own.

Mr Chavez has pledged highly preferential oil prices, with Caracas picking up 40% of the cost if oil is selling at more than $50 a barrel, as it is now.

But he has insisted all this new business must be between governments, saying that the region could not hand any more natural resources over to Texaco and other private companies.

This leads in nicely to another story from the CBC….

Apparently leger has done a poll (just before Hurricane Katrina) asking Canadians whether Nationalized oil and gas companies are the way to go. Surprisingly, or perhaps not, nationalization has a lot of support in Canada. Especially the further East you go.

The Canadian Press said Monday a Leger poll suggested 49 per cent of respondents want petroleum resources nationalized while 43 per cent said they would like to see the same fate for gas companies.

….

Quebecers were the strongest supporters of resource nationalization at 67 per cent, followed by residents of the Atlantic provinces at 53 per cent, Ontarians at 45 per cent and British Columbians at 42 per cent.

As would be expected, Albertans, and other Prairie folk are the least cool with nationalization… and BC’ers are betwix-and-between, it’s that rural conservative base fighting with the urban elite and youth as usual.

Albertans have good reason to be skeptical of nationalization after what happened during the last oil crisis with the National Energy Program. Much bitterness still pervades Albertan society…

However, it may be time to consider nationalization once again. No, not because I am jealous of Albertans wealth and want a piece for me… but rather because Canada depends chiefly on its’ massive natural resources to survive. At the end of the day, decisions must be made that will benefit all of Canada and all Canadians. The incredible skyrocketing gas prices will be a drag on all sectors of the economy, from business, to industry, to the consumer, to government. We must develop a program that will do the following:

a) Allow Canadian consumers and business to thrive regardless of the increasing price of oil and refined products.

b) Make it clear to Canadians (especially those living in Oil-rich provinces including Alberta, BC, Saskatchewan, and Newfoundland & Labrador) that oil is a limited resource and it is in the best interest of all to develop alternatives now. Alberta is already one of the leaders of new wind energy developments in Canada but electricity generation is only a small portion of the effect of the Oil Economy. More must be invested in research and development of the next driver of the worlds economy after oil.

c) Funding transportation initiatives that will create a more efficient network to move Canadians around town and around the country. It is simply impossibly expensive for cities or even provinces to fund the projects needed to modernize the railways and expand public transport…. the federal government must be involved and there is no reason why ever increasing amount of money that we gain from increased oil revenues not be funneled into developing modern and fuel efficient transportation options for Canadians. This can be done through rebates to buy Ultra High Efficiency Vehicles or public transport or even funding the construction of dedicated all-weather (important in Canada) bike routes.

I’ve actually been thinking about this nationalization thing for awhile and it appeals to me on many levels. Perhaps it would be an extreme, but I am beginning to think that as the cost of transporting goods rises nationalization will be the only way to control those costs and continue to guarantee workers a reasonable wage. The recent (if not still ongoing.. I haven’t heard) truckers strike that shut down the Port of Vancouver (the 3rd largest port in North America) for a two weeks over the summer is a perfect example. As the price of gas has risen private truckers have had to take the hit because their companies refused to take the cost on themselves. Only the Federal, provincial and municipal governments have the long-term resources to absorb those costs.

How many billions, of dollars were lost to the Canadian economy due to the shutdown at the Port of Vancouver? If industrial transport was nationalized, would the increase in gas prices been as much of a hit on a national scale? It’s questions like these which need to be seriously, and objectively looked at.

I predict that if gas prices hit $2, as I predicted in the last threat (oh god, a prediction on a prediction… oh well) it will be a no-brainer that it’ll be a major Election Issue. We’ll see what the parties have prepared for their platforms.

6 thoughts on “Hugo Chavez likes Nationalized Oil… so do Canadians”

  1. “a) Allow Canadian consumers and business to thrive regardless of the increasing price of oil and refined products.”

    “b) Make it clear to Canadians…that oil is a limited resource and it is in the best interest of all to develop alternatives now.”

    It may be difficult to avoid sending consumers a mixed message if Canada tries to do both (a) and (b) at the same time. Personally, other than to meet very-short-term disruptions, I would neither subsidize fossil fuel energy consumption nor leave the future entirely to market forces. The need is to get away from thinking in terms of such open-ended choices. I would prefer to think of government action and market forces as different stages of a single transition.

    We need right now a very serious but time-limited government policy to increase the market for alternative energy. When this market is large enough, government can back off and let market forces take over. In other words, stress the positive.

  2. David,

    You’re right it is sort of a mixed message and with peoples built-in experiences and biases it becomes an even harder message to get across.

    I wouldn’t support never ending control of resources and transportation… but we are dealing here with what I think is a major shift in how Humanity interacts with the world. It will not be (if we’re lucky) a quick transition but it will be so profound that it needs leadership in order to transition peacefully and efficiently.

    That leadership has to come out of government… unfortuantely, I don’t foresee any leaders amongst the current crop of Prime Ministers, Presidents and other up-and-comers who have the sort of long-term vision this would require.

    This needs to be a project on the scale of Apollo, but with, as you say, a known time limit or end point where private individuals will then be able to take control where appropriate in order to for the economy to grow and diversify (something which Apollo and NASA had failed to do up until the X-Prize hit the scene just a few years ago).

  3. David,

    You’re right it is sort of a mixed message and with peoples built-in experiences and biases it becomes an even harder message to get across.

    I wouldn’t support never ending control of resources and transportation… but we are dealing here with what I think is a major shift in how Humanity interacts with the world. It will not be (if we’re lucky) a quick transition but it will be so profound that it needs leadership in order to transition peacefully and efficiently.

    That leadership has to come out of government… unfortuantely, I don’t foresee any leaders amongst the current crop of Prime Ministers, Presidents and other up-and-comers who have the sort of long-term vision this would require.

    This needs to be a project on the scale of Apollo, but with, as you say, a known time limit or end point where private individuals will then be able to take control where appropriate in order to for the economy to grow and diversify (something which Apollo and NASA had failed to do up until the X-Prize hit the scene just a few years ago).

  4. I completely agree that the transition will require a powerful government role and will take several decades at least to achieve. But there are two approaches government can take:

    1. One is the Apollo approach of pulling together scientific and engineering talent on a massive scale and making huge public investments. Unfortunately, America’s experience with top-down research in energy has not been encouraging. First, we created a federal Department of Energy in the 1970s that was supposed to give us new energy. But thirty years later, the Department still hasn’t caused any new energy to be produced of which I am aware. Second, the federal government has spent substantial amounts on fusion energy research that has always promised to deliver in fifteen years. Half a century later, it is still no closer to being practical. There are engineering reasons why fusion has struggled for so long and why it may not be practical for a very long time to come.

    This is not to say that basic research can’t be useful. I was very disappointed when NASA cancelled its Breakthrough Propulsion Physics Program in 2002:

    http://www.grc.nasa.gov/WWW/bpp/

    Th BPP program was the kind of effort that if sustained could someday bring really dramatic breakthroughs in energy as well as space travel. But it is a long-term investment, not the kind of program that we should depend on to get us as quickly as possible out of our present energy dependence.

    2. The other approach, and the one I favor, would be to grant subsidies to consumers who shift to proven alternative sources of energy that the private sector can bring to market. These technologies (eg. solar panels, hybrid electric cars, light rail) will not get us fully away from fossil fuels but they could reduce demand substantially if consumers gave them a larger market. Subsidies and new infrastructure, especially to encourage public transport, could enlarge this market and make existing alternative energy sources economical.

  5. Visionary leadership is in short supply all over the planet it seems. Political gamesmanship seems to be the order of the day in most modern countries and all the 3rd world.

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