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A Prelude to the Foundation of Political EconomyThe Globalization of Energy

A Prelude to the Foundation of Political Economy: The Globalization of Energy [The purpose of this chapter is to show that, since the early 1970s, the market prices of all energy sources have been regulated by the global market value of crude oil, which in turn depends upon the magnitude of individual value (or production price) of production units located within the least productive oil fields of the continental United States. Thus, historically and methodologically, the globalization of the petroleum industry, together with the preponderant influence of US oil capital over other energy sources—especially its control over US coal—should be considered as (1) the primary basis of an allembracing energy industry consisting of all sources and (2) the driving force behind the globalization of the energy industry across the world. In this fashion, the individual capitals associated with the production units belonging to traditionally autonomous industries (such as coal, oil, and natural gas industries) had to compete directly with each other regardless of the immediate use value produced, according to the law of intraindustry rather than interindustry competition. Hence, contrary to the conventional wisdom, the control of oil capital over other energy sources, which resulted in further integration of energy, has led to further competition in the sphere of production within the entire energy industry worldwide.] http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png

A Prelude to the Foundation of Political EconomyThe Globalization of Energy

Part of the The Economics of the Middle East Book Series
Bina, Cyrus
Springer Journals — Oct 13, 2015
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15 pages

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Publisher
Palgrave Macmillan US
Copyright
© Palgrave Macmillan, a division of Nature America Inc. 2013
ISBN
978-1-349-29671-2
Pages
159 –174
DOI
10.1057/9781137106971_7
Publisher site
See Chapter on Publisher Site

Abstract

[The purpose of this chapter is to show that, since the early 1970s, the market prices of all energy sources have been regulated by the global market value of crude oil, which in turn depends upon the magnitude of individual value (or production price) of production units located within the least productive oil fields of the continental United States. Thus, historically and methodologically, the globalization of the petroleum industry, together with the preponderant influence of US oil capital over other energy sources—especially its control over US coal—should be considered as (1) the primary basis of an allembracing energy industry consisting of all sources and (2) the driving force behind the globalization of the energy industry across the world. In this fashion, the individual capitals associated with the production units belonging to traditionally autonomous industries (such as coal, oil, and natural gas industries) had to compete directly with each other regardless of the immediate use value produced, according to the law of intraindustry rather than interindustry competition. Hence, contrary to the conventional wisdom, the control of oil capital over other energy sources, which resulted in further integration of energy, has led to further competition in the sphere of production within the entire energy industry worldwide.]

Published: Oct 13, 2015

Keywords: Production Price; Energy Industry; Natural Monopoly; Monopoly Rent; Surplus Profit

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