<DrumBeat: October 17, 2008 The Oil Drum DrumBeat: October 18, 2008>

76 comments on A 1979 GAO Energy Report - A Template for the Future?

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ROCKMAN on October 17, 2008 - 12:31pm Permalink | Subthread | Parent | Comments top

One aspect of a rationing plan that could truly generate a state's right battle is royalty oil belonging to the various oil producing states. I don't have the details in front of me, but the state of Texas owns a considerable amount of oil producing mineral rights especially in those old fields out in west Texas. The revenues from these royalties fund a significant portion of the state's high education system. But more to the point: typically royalty owners have their share of the production sold by the operator acting as their agent. But that royalty may also be taken in kind. Thus Texas (and I assume La, OK, MS, Al, WY, Cal et al) could take a significant portion of US oil production and direct its use as they so desired. For instance, perhaps Texas would deliver their royalty oil only to refiners (many of whom operate in Texas) if the refiner pledges to only market the products within the state.

Now wouldn't that ignite a blood mess?

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Gail the Actuary on October 17, 2008 - 1:23pm Permalink | Subthread | Parent | Comments top

It sounds like you are talking about states circumventing the rationing system.

Since states have the right to tax production (in money or in a % of produced amount), it sounds like it might be possible. Depends on how strong the US is in overseeing any rationing. I'd think you would need a pretty strong top-down approach.

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ROCKMAN on October 17, 2008 - 1:57pm Permalink | Subthread | Parent | Comments top

Gail -- I'm not talking about a state working a tax angle in the rationing scheme. The oil I'm talking about actually belongs to the state. They purchased those mineral rights long ago. The status of those rights is no different than the royalty rights the Feds own in the OCS. The state can take physical possession of all that oil and do as it wishes with it. Somewhat similar to the Colorado River water right Cal purchased years ago. I doubt Cal would accept the Feds coming in and giving that water to AZ, for instance, regardless of how "fair" such a rationing plan would be.

On the one hand, I don't think such actions are guaranteed. But I've been in Texas for almost 30 years and have a good handle on state politics and general public sentiment towards the Feds. In a truly catastrophic long term shortage situation (a true nightmare scenario) I can honestly envision an armed conflict if it came to it and neither side back off. That may sound absurd to some but come on down and spend some time here...might change that thought. I’m really not being a doomer. I just really know the folks down here. It’s not just an old joke: many here think of themselves as citizens of Texas before they consider themselves US citizens.

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Nate Hagens on October 17, 2008 - 2:08pm Permalink | Subthread | Parent | Comments top

Rock
do you remember in the energy crises in the 1970s some Texas and Louisiana politicians saying something to the effect 'well we don't HAVE to sell our gasoline to other states. it is ours after all.."

I remember reading about that buy can't find link...

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ROCKMAN on October 17, 2008 - 2:54pm Permalink | Subthread | Parent | Comments top

Nate -- I'm sure it was said numerous times back in the days of "Let Them Yankees Freeze in the Dark" bumper stickers. And here’s a link with a bunch of Texas political tongue wagers:

http://www.barrypopik.com/index.php/texas/entry/let_the_bastards_freeze_...

The thought wouldn't be so disturbing if I didn't really see the potential for such a conflict. Until the recent economic meltdown and the prospect of OPEC becoming (MAYBE???) an effective cartel I couldn't imagine a scenario where it might come to that sort of conflict. Are you in TX? If so you may understand that long standing and somewhat buried resentment towards DC that many here harbor. The conditions that Texas required the Feds (both factual and urban legend variety) to accept before voluntarily joining the Union is well known by most native borns. I've been here for 30 years and am still considered as a TBC...Texan By Choice.

Folks...I do kid around here a lot...just my nature. But I really am concerned about such a prospect if the SHTF really hard.

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puhkawn on October 17, 2008 - 4:40pm Permalink | Subthread | Parent | Comments top

Actually the most popular bumper sticker was, "Let the bastards freeze in the dark." This was in reference to most of the natural gas produced in the state being obligated to be sent out of the state to the midwest. They were everywhere including one on each of my tankwagons and employees' cars.

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Gail the Actuary on October 17, 2008 - 7:27pm Permalink | Subthread | Parent | Comments top

Now that I think of it, this may be the reason Matt Simmons puts together maps of energy resources by states, and figures out which states are importers. Georgia and Florida do pretty badly. Florida, Louisiana, Wyoming, and Kentucky do pretty well (from memory). I am sure there are others too.

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Nate Hagens on October 17, 2008 - 7:39pm Permalink | Subthread | Parent | Comments top

If there is ever a cheese shortage, I'm in good shape...

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souperman2 on October 18, 2008 - 9:05am Permalink | Subthread | Parent | Comments top

You live in Tillamook?

Kidding

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76 comments on A 1979 GAO Energy Report - A Template for the Future?

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