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Comment by burkaman | Hacker News Reader

This kind of thing seems to be pretty core to the oil industry business model. In the US when they don't want to deal with an oil well anymore they have whatever fake shell company owns it declare bankruptcy and then they don't have to deal with cleaning it up (https://www.propublica.org/article/oil-orphan-wells-cleanup-...).

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This is a feature of all resource extraction industry. I live in New York - we have 100+ year old oil related hazards in western NY to this day. My folks had a gravel mine near their home that would occasionally cause issues relating to flooding and some sort of contamination that was there.

IMO, these industries need to be heavily taxed if not owned by the government.

> IMO, these industries need to be heavily taxed if not owned by the government.

... or for every building and infrastructure, a bond needs to be placed with the government to be a safeguard for its demolition cost, and for projects that risk environmental damage (mining, oil drills), proof of insurance needs to be provided before the construction begins, and should that insurance ever lapse, the entire property gets seized by the government.

And don't forget retroactive claw backs on any profits taken; otherwise they'd make sure the assets to be seized are of absolutely no value (and canonically, negative value: all the environmental disaster and other collateral damage is offloaded to the public)

Isn't that the whole purpose of "limited liability" corporations? So that the owners can abscond with the profits and leave the mess to the public?

Western Australian here confirming all resource extraction does this. Woodside and Adani are the most egregious that come to mind but they all do it.

What stops the government from doing the same thing as private industry?

My (insane) personal opinion is that resource extraction is inherently politically corrosive and we should start seriously thinking of a plan to sunset it. Resource wealth is inherently feudalist, the incentives it offers run contrary to any sane economic system, and any resource wealth that is extracted distorts the market.

It often doesn’t. But it is possible to have effective regulatory oversight systems and taxation. Norway is the model.

It’s the ultimate rent seeking model, and like the old telecom & utility monopolies, they should be on a tight leash with moderate profits.

Where do you plan to get the resources if we aren't extracting them from somewhere?

>IMO, these industries need to be heavily taxed if not owned by the government.

The problem with this is that it adds cost to the commodity and now you can't properly compete on a world stage against extraction that comes from other jurisdictions that are paid enough to not care. The world free trade regime really needs a rethink if we are going to have proper standards for extraction like this. Say, a trading bloc of ethical commerce. If countries don't play ball then they're out, and unannounced compliance inspections should occur all over the trading bloc ran by an independent member-state multinational institution.

Yeah, coal companies got out of a bunch of medical expenses they owed miners in the U.S. by bankrupting their subsidies.

For some industries it seems crazy not to nationalize

given perverse incentives derive directly from profit motive it seems crazy not to nationalize just about everything.

I highly doubt the best solution to this sort of problem is one size fits all.

Based on any evidence or just going with your gut on this one?

An easier solution would be to simply require companies to pay a bond for the cost of closing down operations before they’re allowed to start extracting resources.

This is likely the closest thing to viable, some sort of mineral extraction permanent life insurance policy to protect the surrounding area and workers would go a long way toward safeguarding the wealth created from being swallowed in shareholder greed.

My own country was perfectly fine sacrificing a region for monetary gain. In fact most countries have nationalized their oil and gas fields.

Except for the global south. That's how you get couped by the US (see Brazil 1964, Bolivia 1971, Iran 1953, Syria 1949, Iraq 1963, Indonesia 1965, Venezuela 2002, etc)

woops, this was meant to be a reply to forgetfreeman's comment

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