How U.S. Patchwork Land Ownership and Regulation Affects Oil and Gas Drilling
Description
Unlike most other countries where the government owns the rights to all minerals, the United States has fragmented mineral ownership, where the rights to extract oil and gas can be owned by the federal government, state governments, and private owners. Different owners put different requirements and regulations on oil and gas firms, and these in turn affect the profitability and therefore the likelihood of drilling. Evaluating the effects of federal versus state and private policies is challenging because the land that remains in federal ownership tends to be more remote, rugged, and arid—making drilling more costly. In Wyoming, however, the Land Ordinance of 1785 mandated that certain regularly spaced plots of land be transferred to state ownership upon statehood. The transfers resulted in a regular pattern of side-by-side state-owned and federal-owned land that persists today and provided the setting for a natural experiment that helps us understand the effects of land regulations. This report explores the Wyoming setting to show how regulations on state-owned land affect the likelihood of drilling on nearby federal-owned land.Department
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Citation
Lewis, Eric (2020). How U.S. Patchwork Land Ownership and Regulation Affects Oil and Gas Drilling. Mosbacher Institute for Trade, Economics & Public Policy. Available electronically from https : / /hdl .handle .net /1969 .1 /190965.
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