Nationalize Oil and the Oil Industry
Under Community and Workers Control
Montreal — Almost half of Canadians wanted to see their petroleum resources and their gas companies nationalized as fuel prices hit record levels, a new poll suggests.
The Leger Marketing telephone survey of 1,500 people was conducted between Aug. 24 and Aug. 31, the bulk being done before the devastating effects of hurricane Katrina were felt.
n the Leger poll, which was provided to The Canadian Press, 49 per cent of respondents wanted petroleum resources nationalized while 43 per cent said they would like to see the same fate for gas companies.
Quebeckers 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 Columbia at 42 per cent.
Forty per cent of respondents on the Prairies and 36 per cent of Albertans were in favour. Among those opposed, Albertans led the way at 49 per cent followed by British Columbians at 39 per cent.Quebec led in support for nationalization of oil companies, with 61 per cent in favour, followed by the Atlantic provinces (46 per cent). Alberta was most opposed at 59 per cent, followed by the Prairies (49 per cent), B.C. 46 per cent and Ontario, 41 per cent.
We need to seriously look at the success Venezuala has had with its nationalization under workers control for a model of what to do in Canada with our Gas and Oil Reserves, the majority being in Alberta, and the American Oil companies.
In this case it should not be about the Federal Government owning the resources, but the people, under a Prodhounian share capital model, with workers on the boards of directors and acting along with the public as share owners of the nationalized industry.
First Nations peoples need to have a direct ownership in the resources, which are all situated on their lands and which they have not been compensated for by the Provincial government.
And as the Globe and Mail reported this spring; Crude awakening
The world's thirst is not sustainable as experts predict an imminent decline and fall in oil production. In this seven-day series, the Globe investigates what awaits the world as the reserves dry up.
In this age of Peak Oil, with a decline in reserves that will bottom out in 2010-2020 the price of oil and gas will only continue to rise. Despite the previous two oil driven recessions, 1974 and 1984, that was not about declining reserve stocks, but about at the well head price increases by OPEC. Today with China, India and other newly industrialized (read Fordist automobile production) countries vying with the US for market share of oil and gas, prices will continue to rise. See the Economist article below.
This rise in oil and gas prices has effectively made the Alberta Tar Sands a viable economic operation. While it has put royalties and tax funds into the Alberta economy giving us ten years of surpluses, in actuality Alberta Royalties and Taxes from Oil and Gas are the lowest in the world. In fact we make more money in VLT's and Tabacco taxes then we make off the Tar Sands.
This is the essential reason that our resources need to be taken out of the hands of the State, in this case the Alberta Government, and put back in the hands of the people, us the citizens, the first nations, and the workers who construct, produce and deliver the oil and gas.
The success of Petrocan which the Liberals just sold off the last Federal investment in, proves that a nationalized oil company can weather the storms of volatile markets.
And there is the irony as the Edmonton Sun editorial below points out. That in order to fund its Kyoto targets the Liberals cut their nose to spite their face and sold off the public's shareholdings in Petro Canada as oil prices began to skyrocket.
Clearly we cannot trust politicians whether Ralph or Paul, to keep the public's best interests in mind. It will take real public ownership of our oil and gas resources as well as the secondary, tertiary production, refining and distribution to benefit all of us.
CALGARY -- Gasoline prices across Canada and the United States are expected to ebb this week from their current record levels, but the worst may be yet to come for the cost of heating oil.
As of yesterday morning, the nationwide average cost of a litre of regular gasoline jumped by 22 cents -- a record -- to $1.26, also a record, according to a weekly survey from M.J. Ervin & Associates Inc. that substantiated earlier anecdotal reports of surging prices.The sudden and rapid rise in the cost of gasoline sparked calls for government regulation or investigation into the oil industry
The highest prices were recorded in Newfoundland, which also regulates the cost of gasoline. Gander had posted prices of $1.496 a litre, while St. John's was slightly lower at $1.481 a litre.
The single largest increase was in PEI; for free-market prices, the biggest jump was in St. Catharines, Ont., where the cost of gas jumped 35 cents a litre to $1.334.
Drivers in Edmonton were the least worst off in the country. Prices rose by 11.5 cents to $1.098 in the Alberta capital, where lower provincial taxes keep down the cost of a fill-up.
The smallest increase was in Whitehorse, where prices barely budged, rising just 0.8 cents to $1.175 a litre.
From Thunder Bay westward, price increases were much more muted, with no city recording a rise of more than 16.9 cents a litre, well below the national average.
The Edmonton Journal Friday, September 02, 200EDMONTON - Motorists may have to put up with erratic prices at the pump for a few more days as gasoline supplies remain tight in the wake of hurricane Katrina.
Regular gas prices in Edmonton ranged Thursday from below $1 to $1.29 a litre, an overnight jump of 29 per cent, the greatest one-day price hike in recent history.
This came in spite of a moderation in world oil prices, which have dipped just below record prices of $70 US for a barrel following a steady climb.
Protest organizer Eric Bijeau said refineries are raking in excess profits and governments aren't doing anything about it.
Ironically, most of our oil and gas resources are "nationalized" in that they belong to the people of Alberta, who license energy companies to exploit them. Albertans will collect over $10 billion this year in royalties. Back in the terrible days of the NEP, Pierre Trudeau imposed his own royalties on Alberta's resource in the form of two confiscatory taxes, and force-fed the industry with massive tax incentives to move their exploration activities away from Alberta and onto remote federal lands.A slightly smaller number of Canadians (43%) told Leger they'd go one step further and nationalize the oil companies. Presumably this government agency would dispense gasoline at rock bottom prices and basically ignore world market forces. Where the bargain-basement crude would come from is never really answered. Our best guess is the Oil Fairy
Albertans have seen all of this before. The NEP was a partial confiscation of the province's resources. Ottawa's integrated oil agency, Petro-Canada, was supposed to act as Trudeau's "window" on the oil industry.
PetroCan was created with massive amounts of Canadian taxpayers money in several controversial takeovers. Ironically, it was only a few months ago that Ottawa sold off the remainder of its Petro-Canada shares so it could have billions of dollars available to implement its equally controversial Kyoto accord, which is seen by many as another assault on Albertans' oil and gas riches.My Response to this bit of Son of NEP hype appeared today as well as this editorial.
The Edmonton Sun published my letter to the Editor today.
RE: PAUL Stanway's Sept. 4 column. The real issue in Alberta, from the time of Peter Lougheed until today, is that the people of this province who own the resources do so in name only. Instead of worrying about a new "son of NEP" we should be concerned that this tired old Tory government has failed to secure our resources. They have sold them off to monopoly oil interests for a song. We need to put our energy resources directly under provincial control - that is, nationalize them as they have done in Venezuela and other countries, which get much higher royalties than we currently do.
(Petro-Alberta?)-Sun editor comment
Should Canada's petroleum resources and oil companies be nationalized?
Not sure. 5%
Total Votes for this Question: 329
As for the Sun's blithe comment about the Oil Fairy lets look at what the much vaunted uber-capitalist magazine the Economist says about that, shall we. And low and behold guess who does not set their oil and gas prices by the much vaunted free market, well the Good Ol US of A.
From The Economist print edition
Oil prices could yet go higher—unless the world's biggest gas guzzlers curb their thirst
THE price of oil affects the cost of almost everything. It helps determine not just the cost of driving to work or flying off on holiday, but also the cost of furniture, food and anything else which has to be transported from factory to shop floor. The past three global recessions were all triggered by a jump in oil prices. Thus, it should be alarming that oil prices have more than tripled since late 2001. So far, though, the world economy has held up remarkably well: global GDP growth is strong and inflation remains modest. How long can this continue?
The optimists point to a host of reasons for why “this time is different” and why high oil prices will not trigger a global downturn. For example, it is claimed that in real terms, adjusted by consumer prices, oil is still cheap. Most businessmen reckon that is tosh: relative to producer-output prices, real crude oil prices are now close to a record high (see article). In any case, the notion that rising oil prices have no economic impact until they hit the previous peak in real terms is ridiculous.
The main reason why high oil prices have so far not kiboshed the world economy is that cheap money has supported spending sprees and housing bubbles in many countries, notably America, which have offset the impact of dearer oil. The two main engines for the world, the United States and China (also the two biggest oil consumers), have both had their growth boosted by lax monetary conditions in the past couple of years. Indeed high oil prices can partly be seen as a consequence of low interest rates. The two most important prices in the world economy are the price of oil and the price of money, and they are linked. If interest rates are abnormally low (in bond yields as well as short-term rates), then as global demand increases in response, oil prices should rise—especially if production capacity is tight, as it is today.
So referring to the recent climb in oil prices as a “shock” is misleading. The market is simply responding to stronger oil demand on the back of a strong world economy. The increases in both global GDP and global oil consumption last year were the biggest for almost 30 years. Rising oil prices may even be read as a signal that global economic growth has been more rapid than existing output capacity can sustain. Normally, bond yields would perform that role. But the bond market has been behaving mighty oddly, with yields falling over the past year. The rising oil price is thus taking some of the job of constraining the world economy away from higher interest rates. From this point of view, a high oil price is quite healthy, a way of helping to prevent the global economy from overheating. A much more efficient solution would be tighter global monetary conditions. But tighter money now risks pushing the housing and borrowing booms into reverse, tipping economies into recession.
Moreover, even if rising oil prices are a natural market response to rising demand, they can still have nasty consequences for slower-growing economies, such as Europe's. Excessive growth in demand in America and China is, in effect, imposing a tax on others by pushing world prices higher than they would otherwise be. Even more serious, with little spare capacity in the oil industry, such rapid growth in consumption leaves the market vulnerable to any supply disruption, like those that initiated previous oil shocks.
This effect is exacerbated by the fact that the economies that are currently growing the fastest tend also to be the least efficient users of oil. To produce one dollar of GDP, emerging economies use more than twice as much oil as developed economies. Many emerging economies, including China and India, subsidise oil. Insulated from the reality of rising world prices, consumers guzzle more oil than if they had to pay full market prices. This, in turn, pushes global oil prices higher.
Such pressures are likely to grow. The IMF forecasts that over the next five years emerging economies could account for almost three-quarters of the increase in world oil demand. China has single-handedly accounted for one-third of the growth in global oil demand since 2000. With China's oil consumption per person still only one-fifteenth of that in America, it is inevitable that its energy demands will increase over the coming years if its income does too. But China's consumption is also being inflated because domestic petrol prices have not been allowed to rise as fast as crude prices. It is time for governments to scrap price controls and subsidies to allow the market's price signals to get through to consumers.
It is easy to point a finger at China's growing oil demand (which has in fact cooled off this year), but America remains the biggest consumer, using one-quarter of the world's output of the black stuff. America uses 50% more oil per dollar of GDP than the European Union, largely because consumers pay less. As petrol prices have hit $3 a gallon in some cities, there has been an outcry from motorists. Even so, petrol remains dirt cheap in America, compared with Britain or Germany where prices are above $6 a gallon. America's heavy dependence on oil not only leaves the economy more vulnerable to a supply shock, it also pushes prices higher for the rest of the world.
The best long-term solution—for America as well as the world economy—would be higher petrol taxes in the United States. Alas, there is little prospect of that happening. America, unlike Europe, has preferred fuel-economy regulations to petrol taxes. But even with those it has failed abysmally. These regulations have been so abused that the oil efficiency of its vehicles has fallen to a 20-year low. This week, the Bush administration announced proposals for changing the fuel-economy rules governing trucks and sport-utility vehicles, but failed to close loopholes that allow these gas guzzlers to use more petrol than normal cars, a shameful concession to carmakers.
America and China, in their different ways, are drunk on oil consumption. The longer they put off taking the steps needed to curb their habit, the worse the headache will be. George Bush once learned that lesson about alcohol. It is time for him to wean America off oiloholism too.
Here the scion of Capitalism is calling for an INCREASE in TAXES. Whooa. And yet in Canada across the board governments provincially and federally are wringing their hands saying there is nothing they can do about the increases we are facing at the pumps, for home heating and of course for electricity and other utilities that are gas fired.
Gas tax cut call falls on deaf ears
Canadians are wasting their breath calling on governments to cut gasoline and home heating oil taxes, say economists and tax experts.
Ever since the price of gasoline burst through the $1 per litre barrier earlier this summer, pleas and demands for tax relief have been rising with each increase at the pumps. With the exception of Nova Scotia, which is pondering the removal of the provincial sales tax on heating oil, governments across the country have swiftly squelched the idea of lowering fuel levies.
That's because governments are loath to give up any taxing power, said David Perry, an economist with the Canadian Tax Foundation.
Once a tax is removed, "you'll never know when you'll need them again," he said in a recent interview from Toronto.
"Also, if you get rid of a tax, you're throwing the load on other taxpayers. If you drop the tax in one area, you'll have to raise it somewhere else."
There is also the so-called slippery slope argument of bureaucrats who say that once a tax is removed in one area, demand for the subtraction of others would increase, said Perry.
The Canadian Taxpayers Federation, the Canadian Automobile Association, a host of other organizations, and opposition politicians have called for the removal of the goods and services tax from fuel - gasoline in particular.
In Alberta the real increases, price gouging, we experience is in our Electrical bills while we get the joy of having less drastic increases at the gas pump. Since the failed deregulation of Electrical utilities in the province we have seen these companies like their oil company counterparts rack up enormous profits, while consumers are paying more and more.
Canadians being social democrats by and large except for those living in Calgary are open to public ownership of our resources. Unlike those neo-cons whose fetish is for the privatization of everything, we recognize the social benefit of public ownership.
Here in the home of the neo-cons the City of Medicine Hat owns its oil, gas and utilities giving it the lowest utility rates and pump rates in the country. Public Ownership works for the benefit of all even in Alberta.
As in the 1970's and 1980's once again the solution to Peak Oil and the crisis we face is public ownership under community and worker control.
This is something that should be rolling off the lips of Jack Layton and the NDP but sadly is not. Instead Jack has called for yet another commission to look into industry collusion over pricing.
While Bloc Leader Gil Duceppe warns against public ownership, a contradiction that, like the NDP he too is calling for yet another commission to investigate prices at the pump and collusion in the industry.
The Bloc leader also rejected the idea of nationalizing Canada's oil industry, saying it would be too costly and would infringe on provincial jurisdiction. "Natural resources belong to the provinces, and to (nationalize oil) you would have to go over Alberta's head and if we go over Alberta's head it opens the door to bypassing Quebec on hydroelectricity, which as clean energy is an energy of the future," Duceppe said.
There are only seven oil companies in the world so of course there is collusion.
Big oil's bigtime looting
Of the world's seven most profitable corporations, four are ExxonMobil, Royal Dutch Shell, BP, and Chevron. ExxonMobil is the world's most profitable company, making $25.3 billion last year. It and the other three corporations had combined profits last year of $72.8 billion. ExxonMobil is also the world's most valuable company, with a market value, according to Forbes magazine, of $405 billion. The combined market value of ExxonMobil, BP, Royal Dutch Shell, and Chevron is nearly $1 trillion.
And that was last year. A month ago, ExxonMobil, Chevron, and ConocoPhillips announced record second-quarter profits of $7.6 billion, $3.7 billion, and $3.1 billion, respectively. Royal Dutch Shell's quarterly profits of $5.2 billion were up by 34 percent over the same period last year. Other well-known companies like Sunoco also had record second-quarter earnings.
If ExxonMobil were to maintain its current pace of profits, it would cross the $30 billion barrier for 2005. The company's chief financial officer, Henry Hubble, bragged in classic corporatese, ''Our disciplined project management and operating practices deliver the benefits of strong industry conditions to our shareholders."
Duceppe's reluctance to embrace 'nationalization', because he fears it would apply to hydro electricty in Quebec, despite being a Quebec Nationalist, and a marxist lenninst at that, is predictable, it is also laughable as he becomes a centrist politician like the rest.
The Bloc plans to resume its attacks of the government when Parliament resumes Sept. 26 by focusing on the fiscal imbalance, softwood lumber and mad cow.
The high cost of gasoline is another subject over which the party hopes to score some political points.
Duceppe has accused Martin of not having the courage to confront the refineries, which he claimed are making enormous profits.
This is why Public Ownership not State Ownership is needed.
It's an idea whose time has come again, despite the thirty years of neo-con counter-reformation in Canada.
If you wish to support this idea the Socialist Caucus of the NDP is conducting a mail/petiton campaign to get the Federal NDP to move on the idea of Public Ownership and sending the following letter to Jack and the caucus.
I am writing to request that the New Democratic Party of Canada immediately
initiate a major campaign to win:
1. a twenty-five per cent reduction in the retail price of gasoline, then
to be capped at that price, and
2. public ownership of the oil industry in Canada, from oil well to
gasoline pump, under democratic workers' and community control.
long term, low-interest-bearing government bonds.
explanation", the Toronto Star showed that Hurricane Katrina could account
for, at most, an 8 per cent price rise, not the 20 per cent-plus hike that
has occurred. Indeed, the Star did explain the jump as a function of
"company profits or .... price gouging".
is "price regulation" and lowering of federal taxes on gas sales.
be ordered by the government. As for the long term, public ownership is
required because the world's oil supply is being depleted, and current
stocks should be carefully managed in the public interest while every
effort is made to replace oil with environmentally-friendly, alternative
energy resources and systems as rapidly as possible. Commitments to Kyoto
demand it. If consumer prices must eventually rise to fund an energy
transition, the money should go into the public purse, for use in the
public interest, not into private pockets.
accountability, and genuine democratic management are needed now to grapple
with our share of one the world's gravest crises. Regulation of the oil
barons just won't cut it.
democratic public stewardship, put to work for a safe, clean and
sustainable energy and transportation future.
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To NDP Federal Leader Jack Layton and the NDP Parliamentary Caucus: