Oil's New Ball Game

PanAsianBiz ^ | June 21, 2006 | Dr. Bill Belew

[G. Stolyarov II]

In the 1960s, 85% of the oil in the world was available for ownership, development, partnerships, and such. At the time, 14% of the oil reserves belonged to the Soviet Union.

Today it is the reverse of that: 16% of the world's oil is available. 65% is owned by the nations that possess the fields and 19% has limited access -- that is, nations, including Russia, will allow others to invest in and partially own their oil fields.

It's different now. And, shall we not forget there are some nations that will allow investment and development and then, when all is said and done, kick out the major investor?

The rules are different than they were 40 years ago.

Question: when will the world become less dependent on oil? How about exploring nuclear power again?

Nearly 80% of the energy in France comes from nuclear power. I reckon the French don't care at all what the rest of the world does with its oil.

Why can't other countries do that? Why not the US?

What do you think?

[G. Stolyarov II]

Today the oil market is much more restricted than it used to be, because governments own the vast majority of the world's oil -- which puts those governments' private partners in constant danger of expropriation and political attacks. This artificial government-imposed scarcity of oil is indeed a reason for exploring alternative energy sources -- especially nuclear energy -- to overcome the barriers foreign governments erect against private oil extraction. Oil is not *naturally* scarce, but extensive government meddling in the oil industry makes it so. See Dr. Belew's blog at PanAsianBiz

[HuntsvilleTxVeteran]

"It's different now. And, shall we not forget there are some nations that will allow investment and development and then, when all is said and done, kick out the major investor? "

It is not different, Mexico stole the oil fields of Americans in the thirties.

[budwiesest]

because governments own the vast majority of the world's oil --

Which is to say, it'll be mis-managed....at best.