Onshore Federal Royalty Incentives and the US Oil Industry
This paper develops a dynamic empirical framework that can be used to test the effectiveness of the proposed onshore public land royalty incentives in the US oil industry as described in the Energy Policy Act of 2005. The framework embeds the US state-level panel data estimates into Pindyck’s (1978) widely received theoretical model of exhaustible resource supply, and can be applied to any of the 20 states that produce significant quantities of oil. In general, results show that royalty suspension yields moderate to little change in oil drilling, reserve additions and production activity. This outcome suggests that policymakers should be wary of arguments asserting that large swings in onshore public land oil field activity can be obtained from changes in federal royalty rates.
Year of publication: |
2007
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Authors: | Kunce, Mitch |
Published in: |
The IUP Journal of Public Finance. - IUP Publications. - Vol. V.2007, 3, p. 64-82
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Publisher: |
IUP Publications |
Saved in:
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