Friday, June 27, 2008

An Open Question

I have a simple question for everyone today:
At what USD prices do energy property rights create such dislocation, instability and inequality in America that they are de facto seized by the State into the public domain?
Prior lease and mineral rights null & void?? Prior owners and leaseholders perhaps permitted to continue stewardship and extraction under contract? Fixed rates of return to extraction based upon costs, granted and periodically reviewed as with state utility boards? I can envisage some of the fiercest political battles ahead that will cross the lines of philosophy, economics, politics, potentially shredding historical precedents of constitutional law, in attempts to equitably resolve what will be deepening energy and economic crises. Thoughts?

11 comments:

Richard said...

I'm not sure its a germane question. If the issue is to achieve higher production, the problem today is a lack of qualified employees and the tools, like drilling rigs, to do the work. The legal issues of ownership have been settled by each country depending on their political system. Chavez expropriates oil properties anew. Mexico maintains 100% state control, but is ineffective at production. The US permits the use of federal land for oil exploration through bidding for leases, with private landowners getting payments from producers for mineral rights. As a side note, quite a lot of money has been paid to landowners in upstate NY recently for a new gas play, and Arkansas landowners are getting payments for land in the Haynesville shale plays.

Rob said...

I think we'd need to be 5-6 years into a depression before something like this got tabled. Any foreign capital remaining in the US would flee which would only exacerbate the problems. I think they are far far more likely to go for the "speculators" first. They are a much more convenient fallguys, that being said that too will only lead to capital heading offshore.

Sally said...

Scary. You've always been way ahead of the curve ...

"Cassandra" said...

I brought it up, because it's worth considering that the same peculiar homespun populism endemic in USA could/will lead to fascinating times and decisions in nation that's effectively eschewed most forms of collectivism.

Charles Butler said...

Cass,

The outcome really centres on to what extent retired, and conceivably not very wealthy, boomers conveniently ´rediscover´ collectivism as a lifestyle optionchoicewhatever. Canary in the coalmine for the outcome might be the difficulties encountered in dismantling environmental restrictions despite energy shortages and craving need.

Minimum 15 years before you get a peak at the answer.

Anonymous said...

It has already happened , only not within the 50 states, but in the "petrocolony" of Iraq.

Blissex said...

«I brought it up, because it's worth considering that the same peculiar homespun populism endemic in USA could/will lead to fascinating times and decisions in nation that's effectively eschewed most forms of collectivism.»

That's not quite right -- collectivism is discouraged among the majority of people, but works very well for the elites: the bar, medical associations, the Republican party, the Business Roundtable, Chambers of Commerce, Industry Associations, cartels, are all ways in which the USA business elites have used collective action to rule the country and buy themselves a better deal.

It is collective actions by the bottom-of-the-barrel 80-90% of the citizens that has been heavily discouraged both legally and with culture wars.

No surprise there: the business managers and owners know very well that a well organized interest group pursuing collective interests will much more easily prevail on a bunch of isolated "rugged individualist" idiots.

Anonymous said...

Blissex - I take all your points. The spirit of the anti-collectivism rife in the USA that I was implying was meant in the most general sense. I agree with your conclusion and sentiments.

Charles - I have a feeling that these issues will come to boil sooner, given the likelihood of a blow-off globalization convergence that will leave the US relatively more impoverished.

Phil said...

It took a fairly large war to make it happen in the UK, and that was back in the class ridden, state respecting olden days. For the US to do that to domestic suppliers, I dunno - plague, roving bands of cannibals? Anyway, there's a couple of millions/BBL/day to nationalise in someone else's country first, right?

PeeDee said...

My first reaction was "when hell freezes over", but then I was amused to read in the NYT that the US government has placed a two year moratorium on new solar projects on public land claiming an inability to adequately assess their environmental impact. You really cannot tell what these people will do.

Charles Butler said...

But if reality were any match for entrenched mythology, Maoists would currently rule the rust belt.

CB