Bolivia nationalizes natural gas industry

[Kidlicious]

Capitalism takes another hit.

[Dinner]

Only in your mind.

[Barnabas]

Bolivia only sells gas to its neighbours, Argentina and Brazil, Morales says he is selling the gas to cheap to both Argentina and Brazil, so the 3 countries will make an improved new deal for Bolivia.
To export gas to other countries bolivia would need a sea port, which she doesnt have, and the ability to liquify (does that word exist?) , I mean, turn gas into liquid, which can be sent by ship to other countries, which she also doesnt have.

This wont hurt bolivia because she already has the large reserves and the pipes to brazil and argentina.

[pchang]

Hydrocarbons are like deficit spending. If you use the money on things that will pay off in the future (infrastructure, education, etc.) then things will eventually get better. If you use the money to pay current expenses (energy subsidies, general government services), then when the money is gone, you will be in big trouble.

[Arrian]

Originally posted by Brachy-Pride
Bolivia only sells gas to its neighbours, Argentina and Brazil, Morales says he is selling the gas to cheap to both Argentina and Brazil, so the 3 countries will make an improved new deal for Bolivia.
To export gas to other countries bolivia would need a sea port, which she doesnt have, and the ability to liquify (does that word exist?) , I mean, turn gas into liquid, which can be sent by ship to other countries, which she also doesnt have.

This wont hurt bolivia because she already has the large reserves and the pipes to brazil and argentina.

There was a plan to export it via Chile...

-Arrian

[pchang]

Reserves and extraction capability are not the same. It seems likely that Evo will use the money to subsidize government services and price controls in an attempt to improve the standard of living for the poor in Bolivia. Unfortunately, this will most likely lead to a steady decrease in the amount of natural gas that Bolivia will be able to extract which will lead to decreased subsidies for Bolivia's poor. Eventually, Bolivia's natural gas industry will need rebuilding and Bolivia's poor will be no better off than they are now (except for a temporary blip of good times). 20 years from now, I can see Evo being mourned as the only leader who actually cared about the people who was brought down by some multinational oil consipracy.

[Kidlicious]

Originally posted by pchang
Hydrocarbons are like deficit spending. If you use the money on things that will pay off in the future (infrastructure, education, etc.) then things will eventually get better. If you use the money to pay current expenses (energy subsidies, general government services), then when the money is gone, you will be in big trouble.

When you have inflation building infrastructure can aggrevate the problem and compete for scare resources that would otherwise be used to build the domestic economy.

[JimmyCracksCorn]

I think Canada should nationalize its oil industry.

[Darius871]

Originally posted by pchang
That's not the real world. Your job has little to do with the sort of thing most people do for a living. - Agathon

What thread was this?

[Vince278]

I'm not really concerned about Venezeula, Bolivia, and Cuba. They're a problem that's not long from solving itself.

[Colonâ„¢]

Originally posted by Brachy-Pride
Bolivia only sells gas to its neighbours, Argentina and Brazil, Morales says he is selling the gas to cheap to both Argentina and Brazil, so the 3 countries will make an improved new deal for Bolivia.
To export gas to other countries bolivia would need a sea port, which she doesnt have, and the ability to liquify (does that word exist?) , I mean, turn gas into liquid, which can be sent by ship to other countries, which she also doesnt have.

This wont hurt bolivia because she already has the large reserves and the pipes to brazil and argentina.

The reason Brazil and Argentina have been Bolivia's only customers is that Bolivia's known reserves have historically been rather small and therefore its export quantities as well. The situation changed with the discovery of new reserves during the 90's in Bolivia, as well as signicant new finds in Brazil, which requires new export destinations. A pipeline through Chile to export the gas to the US would be the best solution but that was opposed by the same groups that propelled Morales into power.

[dannubis]

Any bets on how long it will take before the first coup ???

[DanS]

Also, the Chile deal was scuttled based on nationalist feelings. I'm more than a little skeptical that Bolivia is acting rationally or practically.

[Flubber]

Originally posted by Colonâ„¢
The situation changed with the discovery of new reserves during the 90's in Bolivia, as well as signicant new finds in Brazil, which requires new export destinations.

Hmm and I'm betting it was oil company expertise and capital that found them. If the oil companies had found nothing, they would have eaten that cost and gone away but if they dare find something good, then it seems some nations think stealing it is ok.

This has to have ramifications for other industries. Who would want to invest there if there is a real chance your investment gets nationalized away?

[KrazyHorse]

Originally posted by JimmyCracksCorn
I think Canada should nationalize its oil industry.

The last time we did that we got Mulroney.