This should be a lesson to the American government as well. People should also keep China in mind. Companies constantly move operations to China for cheap labor. China sits quietly building its economy and its industry. We keep giving ours away. China knows that it is now still weaker, but it is waiting patiently. At some time in the future, China will nationalize all of its foriegn-owned industry, leaving America with serious problems.
A PAZ, Bolivia - President Evo Morales ordered soldiers to occupy Bolivia's natural gas fields Monday and threatened to evict foreign companies unless they give Bolivia control over the entire chain of production.
Morales sent soldiers and engineers with Bolivia's state-owned oil company to installations and fields tapped by foreign companies — including Britain's BG Group PLC and BP PLC, Brazil's Petroleo Brasileiro SA, Spanish-Argentine Repsol YPF SA, France's Total SA and U.S.-based Exxon Mobil Corp. The companies have six months to agree to new contracts or leave Bolivia, he said.
Vice President Alvaro Garcia Linera said troops were sent to 56 locations around the country.
Soldiers took over major gas fields and refineries and, in the eastern city of Santa Cruz where much of the industry is based, occupied some oil company offices, said Tuffi Are, news editor at the El Deber newspaper, one of Bolivia's largest. He said about 100 soldiers were guarding the Petrobras refinery just outside the city.
Morales, a leftist allied with Cuba's Fidel Castro and Venezuela's Hugo Chavez in seeking to blunt U.S. influence in the region, had pledged to exert greater state control over the industry since winning election in December, becoming Bolivia's first Indian president.
..... It comes as Ecuador argues with Washington over a new oil royalties law and less than a month after Chavez ordered the seizure of oil fields from Total and Italy's Eni SpA when the companies failed to comply with a government demand that operations be turned over to Venezuela's state oil company, Petroleos de Venezuela SA. AP
8 comments:
I love how the AP says "failed to comply" where it was more like "refused to comply".
"And people wonder why fuel prices are high?"
Er, as you say that fuel prices ARE high, then they ARE high when the fuel in the supply chain is sourced from private companies.
As Evo Morales 'nationalised' (and he hasn't actually done that, yet) the gas fields this week, any high fuel prices that you or your readers HAVE experienced is most certainly not, unless you have the ability to travel through time, due to Bolivian nationalisation.
Was this a deliberately stupid point, or an attempt to mislead?
Andrew, sometimes prices rise in anticipation of shortages, even if those shortages never materialize.
Are you seriously arguing that high fuel prices (in the USA?) are, to any significant degree, a pre-emptive response to Bolivian nationalisation?
Not "pre-emptive", but anticipatory.
Commodities traders will expect the price to rise, by lots of natural gas in this instance and then the price will rise.
Say Russia, Canada, Kuwait, Saudi Arabia, Mexico, Venezuela, and Equitorial Guinea all said, "We're thinking about stopping the sale of oil to the USA.", but haven't actually done so. The price of gasoline on the spot markets would go through the roof in one day. Never mind that the stuff at the pump has already been bought and paid for by Big Oil.
Now, Bolivia is much smaller. But if South American governments are thinking of seizing fields, you bet prices would go up.
One of my clients drills in Columbia and is thinking of expanding to Peru. Unless Morales backs down soon, I'm willing to gamble that my client is going to shelve their expansion plans.
That's just one company. Many companies might not pull out, but they won't expand to these countries. That, in the long term, drives the cost of natural gas (or oil as the case may be) up. It indirectly, does not employ locals of these countries and even may cause the U.S. concerns to fold as well.
Nationalizing (or seizing) foreign owned assets is never good for the people of the country doing the nationalizing.
I understand perfectly well that prices that might rise in anticipation of a rise in prices of raw commodities.
But I am asking whether you are seriously suggesting that the high fuel prices that YOU and your readers ARE experiencing are the result, in any significant way, of the actions of Evo Morales? If you are, then I can only presume that you are deranged.
In your latest reply, you talk of future events. At the very least, are you willing to accept that your question; "And people wonder why fuel prices are high?", and the direction to understand that the actions of Evo Morales were a significant causal factor (the 'why') in producing this current, not putative future, state, was nothing more than ridiculous, misleading hyperbole?
Andrew, comments like this: " then I can only presume that you are deranged. " are childish.
When you say fuel prices, if you mean natural gas (not gasoline), yes, the actions of Morales are having an impact.
Is Evo Morales's actions the sole cause of high prices? No, but it is a cause, a piece of the puzzle. I don't know how big of a piece it is, but it is a piece... and the fact that no one is talking about it, is the actual problem.
The statement "and people wonder why gas prices are so high" isn't solely attributed to Morales, but much of the media and polticians have been ignoring the supply and demand factors that have raised the price. They take this populist attitude against the oil companies, who don't even control a significant minority of the petroleum reserves.
I don't like paying more for gas than anyone else, but let's not get stupid about the reasons that it is high. Let's solve it in logical fashion.
By the way, if you cut the supply of natural gas (hence raising its price), the price of oil will rise as well.
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