Time to Nationalize Exxon Mobil, Chevron, ConocoPhillips, Shell and BP?

Chevron, the second-largest U.S. oil company, has announced another quarter of record profits—and another quarter of declining production, just like ConocoPhillips and Exxon Mobil, as well as British Petroleum and Royal Dutch Shell, the British-Dutch conglomerate.

In a column published before Chevron’s announcement today, Houston Chronicle business analyst Loren Steffy cautioned that the most serious problem facing national and world economies is not these record profits but that the decline in production by all of the investor-owned, non-nationalized oil companies is getting steadily worse.

Given the planet’s increasing demand for oil, the decline in the investor-owned companies’ contribution to the world’s supply is one of the chief factors raising the price of oil.

Which is one reason Steffy agrees with other analysts that the Clinton-McCain summer gas tax holiday is a very bad idea—because by lowering the price at the pump for the short term, it would only increase consumption and thus further exacerbate both the short supply of oil and its price.

Yet Steffy implies that a windfall profits tax would be a bad idea too, not only because it would not increase the investor-owned companies’ production, but also because it would deprive them of profits that should be diverted to exploration and production instead.

That concern would make sense if the investor-owned oil companies were in fact putting their profits to that use. But that isn’t their track record. All they have proved adept at doing is siphoning off the profits to enrich their investors and above all their corporate officers. That such action is suicidal to their longevity seems to have escaped them. Maybe some tough love would help.

Since windfall profits taxes have not convinced them before, how about something more drastic? Either the investor-owned oil companies document that, starting with the first quarter’s windfall, they are investing every dime of profit in exploration or production, or the United States, the United Kingdom and the Netherlands will do it for them—by nationalizing any oil company that refuses to comply.

Absent such compliance, nationalization appears to be the only way to force the investors to stop enriching themselves at the expense of every oil consumer on the planet—which includes food producers and other businesses that have to increase their prices to cover spiraling oil-related costs.

If the three Western democracies were to take this draconian action, they might have to acknowledge that Hugo Chavez was right about something. If so, however, it will be because the investor-owned oil companies proved him right: they have shown over several years that the free market system is not an equitable way to deliver basic human necessities like energy. Rather, profit-making trumps delivery of resources necessary for life. People literally starve while the profiteers prosper.

Every person on earth has a right to those resources. A financial system which allows a few to subordinate that right to their greed is seriously in need of revision.