Wednesday , November 14 2018
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Public Land & Prices

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David
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Summary:
I tire of the political arguments in either side of this specific issue when I think a fundamental economic issue gets little attention. Those called the “left” oppose this happening at any price. Those on the “right” want the leases available but tend to think the price should be low for unintelligible reasons. I essentially have two conditions on what lease prices should be. The leases should be available to any buyer. If an energy company wants to buy leases they should be able to, but so should the Sierra Club or World Wildlife Foundation. The other condition I have is that the government should get the best price possible. That is there should be no sweetheart deals with either side. That is for political reasons but also for maximum government revenue. Essentially I would like

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I tire of the political arguments in either side of this specific issue when I think a fundamental economic issue gets little attention. Those called the “left” oppose this happening at any price. Those on the “right” want the leases available but tend to think the price should be low for unintelligible reasons.

I essentially have two conditions on what lease prices should be. The leases should be available to any buyer. If an energy company wants to buy leases they should be able to, but so should the Sierra Club or World Wildlife Foundation. The other condition I have is that the government should get the best price possible. That is there should be no sweetheart deals with either side. That is for political reasons but also for maximum government revenue.

Essentially I would like an auction market for the leases where the bids are closed when submitted and then the government reveals the high bid for each lease. Companies and others would need to evaluate their costs and the expected revenue and make a decision about what they could afford. The government can also set some minimum as well if needed due to presumed externalities and other issues. This could be the most efficient and best revenue situation for the government.

Market discipline matters and should be relied when possible, but there are known problems like externalities. The current administration is too friendly with business and likely gives away too much for too little the past one was too unwilling to make the necessary cost-benefit calculations.

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