Oil and Overproduction

David Schanoes dmsch at attglobal.net
Thu Jan 16 10:36:44 MST 2003

Julio wrote:

"That's all there is to the tautology that the value of "goods" is a
reflection of their "relative scarcity" -- as conventional economists put
it.  Marx wouldn't disagree... EXCEPT THAT bourgeois thought focuses on the
attributes of things ("scarcity," "abundance," etc.) as a decoy to shift
attention away from social relations.  That's an aspect of what Marx called
"commodity fetishism."  So, Marx would properly emphasize that we're not
talking about goods or resources in general, but goods or resources in a
particular social setting where they are produced and exchanged as
(capitalistic) commodities."

I believe this captures and expresses clearly the origin and direction of
Marx's examination of capital as a social relation.

 Julio's formulation of rent as a form of labor value is illuminating, and
quite helpful.  It represents a radical compression of the discussion and
points the analysis to regarding land and natural resources as part of the
productive apparatus, where capital value exists only to the extent that it
can be absorbed, floated, circulated, and realized in exchange and the
transformation into profit.

On another topic, or the same topic, a piece of interesting information from
yesterday's NYT:
"Producer from U.S. Shelves Oil Sands Project in Canada," the gist of which
is that a $2.2 billion project to extract oil from oil sands in Alberta was
cancelled.    "Athough oil has been produced from tar sands in Canada for
three decades, companies have barely scratched the surface, extracting less
than 1 percent of reserves."

Production currently is less than 1mmb/d.

Most interesting of all is the reason for cancelling the project: "Mr Park
said that apart from the initial capital expenses the cost of extracting oil
from tar sands was about 7 Canadian dollars ($4.54 US) a barrel, making the
output a 'marginal, high-cost barrel.' "

Those of us old enough to know better will recall that around 1973,
estimated costs of extraction from the development of the Athabasca tar
sands were put between the $15-$25/barrel range.

Now the cost is estimated at 1/3-1/5 of that, the spot price of oil is
$33/barrel, and still the project is not expected to realize enough profit
to support the capital expenditure and the costs of production.

Here then is  our bourgeoisie:  Hoist on their own petard.



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