“…It shall be our duty to promote the development of the Nation’s resources…to exploit its mineral resources…for the benefit of the Irish people.”
~ Democratic Programme of the First Dáil, 1919
The International Experience – What other countries have done with their Oil and Gas
Like Ireland Norway is a country on the periphery of Europe with a large Atlantic coastline. Oil and gas exploration of the Norwegian continental shelf began in earnest in the mid 1960s with the first major oil reserve being discovered in 1969 with a number of other substantial fields being found in the years that followed. While the initial explorations were carried out by foreign, private energy companies the Norwegian government rapidly realised the strategic importance of its energy reserves and established a state-owned energy company named ‘Statoil’ in 1972. Today the Norwegian people still own 67% of Statoil.
At the same time that Statoil was established legislation was enacted that required Statoil to have a 50% minimum stake in all exploration in Norway (this requirement was later modified to allow the Norwegian parliament decide on a ‘case by case’ basis what percentage of a given exploration would be held by the state). Private energy corporations operating in the country pay a tax at a rate of 78% on all production. This compares poorly to the rate in the Twenty-Six Counties which has a highest rate of only 40%.
Over the course of the last thirty years tens of billions of euros have been taken in government revenue from Norway’s oil and gas industry. This wealth has helped Norway become one of the wealthiest countries in the world and also one of the most progressive. Much of the revenue generated from Norway’s oil and gas reserves has been ploughed back into the countries welfare state. Norway ranked as the number one country in the United Nations Human Development Index for the six consecutive years from 2001 to 2006.
Venezuelan oil reserves, which were first discovered in the early 1900’s, are ranked as among the largest in the world. As with the natural resources of so many other countries in the southern hemisphere Venezuela’s oil reserves have provided rich pickings for private corporations from the northern hemisphere.
From the First World War until 1976 the ruling elite of the country formed a greed-based partnership with foreign energy companies. Under this arrangement the energy companies provided the expertise necessary to extract the oil to which the ruling junta gave them free access – in return for a share of the spoils. On the first of January 1976 Venezuela nationalised its oil reserves and simultaneously established the state energy company Petróleos de Venezuela.
While the 1976 nationalisation saw a considerable increase in government revenue gained from the oil industry the division of that wealth fell victim to the corrupt nature of the political system operating at that time. Indeed Petróleos de Venezuela itself became contaminated by the dominant political culture of cronyism and corruption.
In 2002 the management and workers within Petróleos de Venezuela went on strike in an attempt to unseat the democratically-elected President, Hugo Chavez. The strike failed in its objectives and the workforce were replaced in a process of ‘re-nationalisation’ which took place in 2003.
Since then Chavez has increased the rates of tax paid by private energy companies and re-structured the state company and the entire oil industry to maximise government revenue. Between 2004 and 2010 the state energy company, Petróleos de Venezuela, has contributed more than $60billion to social development funds, monies which have been used to provide basic social services, such as healthcare and education to the masses of the population who previously have had no access to such services.
Despite holding the second largest natural gas reserves in South America, along with an abundance of other natural resources, Bolivia has persistently remained one of the poorest countries in the Americas. In recent years, however, that situation has begun to change as the country moves to take back control of its valuable natural resource. This process has been driven by President Evo Morales who was elected by the indigenous majority population, largely on a platform of nationalisation of the countries natural resources.
Bolivian natural gas is simply the latest natural resource to be taken from their country by foreign thieves. As far back as the fifteenth century vast quantities of gold and silver were exported from Bolivia by the Spanish. From the middle of the nineteenth century it was the countries huge tin reserves that were the target of foreign capital.
In the 1990s it was the attempted privatisation of the water supply to the city of Cochabamba that was to provide a dramatic catalyst for a movement for change in Bolivia. The people of that city, and eventually the whole country, were mobilised in support of a programme of nationalisation of the countries natural resources and an end to the neo-liberal ‘market reforms’ imposed by the ruling elite.
Following a protracted period of civil unrest Evo Morales was elected President of Bolivia in 2005. Sworn into office on January 22nd Morales wasted no time in implementing his manifesto. On May 1st of that year Morales announced ‘the state recovers ownership, possession and total and absolute control’ of the countries hydrocarbon reserves. The Bolivian military simultaneously took control of nearly 60 natural gas production facilities. All Bolivian oil and gas reserves were thus taken back into the ownership of the Bolivian people.
Re-negotiation of the terms under which Bolivia’s hydrocarbons could be exploited by private energy corporations followed. Under the revised terms the governments take in terms of royalties and taxes increased dramatically to between 60% and 82%. As with Chavez in Venezuela, Morales has used this increased revenue for the provision of the most basic of social services for the entire population.