Many countries around the world have, or had, their own oil reserves, [and] the oil belongs to the state. But two aspects of the oil supply that are not always clearly separated in people’s minds are: having oil and having a way to process it. That is the big difference between our country and [those] where the oil belongs to the state.
China and Exxon recently signed an agreement for Exxon to build a refinery in China. Obviously China believes it has sufficient oil to meet its needs—or knows how to get it—but they must go [to the West] for help in making their oil useful. …
Here in the United States, we have quite a different situation … [where] the oil is privately owned by either individuals or large companies. In countries where the state owns the oil, supplies are not a concern—and going to war is not part of their foreign policy. In our country, state ownership of our oil, whether a good idea or not, would be unthinkable (unless we consider the Strategic Petroleum Reserve). In time, other countries will follow the lead of China and develop their own refineries. Meanwhile, we will remain dependent on foreign oil, which we will continue to process in our refineries. We have no appetite for state-owned resources, but from time to time we might expect that our government would accept its responsibility to protect us from private interests (Big Oil) [that have the] power to regulate our gasoline supply with impunity.
The arrangement to provide refining capacity to China is ironic, in view of the fact that one of our major domestic-oil suppliers has currently shut down one of its refineries for routine maintenance. They tell us this causes temporary shortages and consequently higher gasoline prices. Owning neither our oil nor the capability to refine it, we in the United States grudgingly pay whatever price oil companies say. Meanwhile, Congress likes the present system, so long as the public stays out of the way.
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