With the risk of sounding dense or naive,I have to ask why, if say Venezuela goes ahead and truly nationalizes some of our oil assets (like the Orinoco rigs), doesn’t the US just bomb the assets, effectively saying if you steal our stuff, we won’t let you keep it.
Is there some hope that we’ll get it back? That hasn’t worked out to well with Cuban assets.
Because doing something like that would probably just escalate tensions with the nationalizing country, and if the other country is going around nationalizing your assets, your relationship with them probably isn’t that great in the first place.
In other words, while the US might be justifiably pissed off by Venezuala siezing its oil wells, the US might figure it’s not worth going to war over.
Problems? You mean like bombing another sovereign country? It really isn’t worth the trouble, both in monetary terms and in international PR. The companies who got “nationalized” just write off the loss, and the government works “diplomatically” to get some relief. Few countries remain estranged from the US as long as Cuba has, and that wasn’t Cuba’s choice.
If you’re willing to bomb the oil rigs, why not just bomb Caracas until the Venezuelans give them back?
Why does the US goverment (or any goverment) feel the need to defend, at public expense, the holdings of a private corporation overseas? It’s not as if the oil companies haven’t factored soverign risk into their NPV calculations before investing. That’s why nationalizing stuff is a big deal, if there were no consequences goverments would be doing it all the time.
It should be the companies sabotaging the installations, if anything, not a bombing.
Still, the productions from those installations will still get sold to the original companies as they are the ones with the ability to process it and they have a ton of leverage on the negotiations since they are not easily saleable crudes. They lose very little. They would lose a lot more if those installations are destroyed.
Furthermore, I think you are mischaracterizing the nature by which Chavez intends to nationalize these resources. I think that he intends to pay something resembling a fair market value for the resources, although I doubt that anyone is rushing into these properties anticipating a big buy-out.
Furthermore, military action would be beyond the pale in response to what is actually occurring with Venezuela at this point. When a company chooses to invest in any nation, there is no natural-born right to a perpetual defense of that property from seizure. Certainly that will discourage future foreign investment in Venezuela, but even in the United States the government can seize property under eminent domain, and even that right has recently been vastly expanded by supreme court decisions.
Among other reasons that’s a bad idea, is it’s not “our” stuff in the first place - those oil rigs are owned by private corporations not the American government. And those owners might be as much, if not more, annoyed at Washington for destroying them as it would be at Caracas for stealing them.
As I understand it, they intend on paying (at least some) compensation.
You don’t sound either dense or naive but yet I fail to understand what your motive for wanting to bomb them is, short of out and out nastiness (which would only justify Chavez’s otherwise OTT rhetoric) .
Because “nationalize” does not mean “expropriate without compensation.”
As threemae has pointed out, even the US and state governments can exercise their right of eminent domain to take over private property against the will of property owners. (They do pay for it, though.)
From what I can glean from a quick web search, Chávez has not yet made it clear exactly what the terms of the nationalization will be, other than that the government would assume a majority share of the projects in question. I doubt that he will take over assets without any compensation, since he still needs foreign investment for oil development. It is fairly likely that the original majority owners will remain as minority partners with the government. They won’t like it, but they’ll still be making a profit.
Even if the Venezuelan government did take over some assets, I fail to see the point of bombing them other than childish revenge. As has been pointed out, the wells don’t even belong to the US. If any action is desired, surely a better strategy would be economic retaliation against Venezuela such as a trade boycott .
The history of the United Fruit Company has a lot of interesting lessons about using the military to secure corporate interests.
It turns out it’s bad.
Besides, don’t you realize that most of that oil ends up here in the USA?
We need it to keep our gas-guzzling SUV’s driving to the suburbs. We can’t bomb the facilities that produce it!
This is probably the most significant reason. But, I did not realize there was “compensation” in the works. Plus I should have considered that the owners (Iknew they were privately owned) consider risk when they construct overseas.
Thanks for all your replies!
For us to bomb the rigs would be cutting off our own nose. The oil companies are not ultimately interested in the wells, just the oil. If they have to buy the oil from wells that are owned by the Venezuelan govt, then they will do that and just carry the increased cost to the gas pump.
Wouldn’t you love it if the British government decided to bomb a BP refinery in the US because the US government decided to fine it $50 million for violating environmental regulations?
The point of my analogy, as absurd as it may seem, is that hardly anybody does things that have a negative financial impact on themselves. Especially in the case of countries, money rules. The US needs Venezualan oil (big time), the oil companies are making money, Chavez sees a way to further tweak the nose of the US and the bankers will play along as long as they are making money.
Also, who’s going to do the bombing. Who owns the rigs? BP is British, Shell is Dutch. Do we form another “Coalition of the Willing” and get the Costa Rican Air Force to do the dirty work?
duplicate
Not entirely, and not for a long time.
You’re referring to that non-existant air force of a country that has a non-existant military, I take it.
Anyway, no one benefits from the destruction of plants. Even the ex-pat Cubans in Florida hold out the hope that some day they’ll get back their factories and whatnot someday.
Exactly what I was thinking of-isn’t that what we did in Chile and Nicaragua, too?
Or to Iran in the 1950s?
And look what we ended up with.