Not unexpectedly, the Bolivian government has seized the production facilities of the various gas and oil producers within their borders. The companies have 180 days to accept new terms or be evicted from Bolivia. In a continued socializing of natural resources in South America, higher oil prices are causing governments across the world to eye profit rich oil companies with envy.

Let us make no mistake about this, if oil was still trading at $20 a barrel, this would not be happening. In a classic spider and fly routine, governments invite foreign energy companies in when oil is too cheap to make exploration a sure deal. They ensure these companies bear the cost of the billions involved in exploration and bringing resources into production.

The result for government is happy voters in energy employment and a stream of royalties for the treasury. But at the back of the mind of every government is the thought that they can seize the assets of these companies any time they want in the “national interest”. If the companies don’t like the new terms and conditions, they can leave (without their production facilities).

Should we sympathise with the foreign companies? Yes, in the sense that this is a classic “politics of envy” scenario and they were the ones who did the work setting things up. No, in the sense that they don’t own the oil and gas under their rigs. It is no surprise that governments want a bigger slice of the pie for their vote winning agendas. It is no surprise that poorer Bolivians saw the burgeoning wealth of oil companies and decided to vote for a piece of the action.

So the time has arrived in South America for resource nationalisation. Globally speaking, this is not important. Bolivia only produces a paltry 40,000 barrels per day of oil. It has much more natural gas (estimated reserves of 60Tcf) but again their market seems to be largely confined to their Latin American neighbours – especially Brazil who gets half of its gas from Bolivia and is none too happy about the situation.

However, in a world where natural resources will continue to climb in price, it is an increasing truism that he who has the energy makes the rules. If current global tightness in supplies is indeed the Herald of Peak Oil, then this form of energy nationalisation will only continue and will spread into other resources such as metals as increasingly impoverished governments realise how valuable these underground assets are.

This is not altogether a win-win situation for Bolivia. Foreign capital is going to start draining from the country as nervous investors pull out. Moreover, like Aramco and Pemex, we are going to see the fat appear on the efficiency of these operations as bureaucracy increases and jobs for the sake of it begin to fill every corner of these facilities.

The royalties may increase but the cost of running the operation will increase as well. That won’t matter to the government or its voters so long as they hold the reins of energy extraction. In all aspects of life, including energy, the symbolism of complete control is all too often the only dogma that matters.