Scheduling and taxation of resource deposits
This paper is concerned with taxation on resource extraction from a finite collection of deposits of uncertain size. The tax system may distort the optimal order of extraction and result in a great loss to society. Specifically, the way the Norwegian tax regime treats foreign firms may discriminate against certain prospects. After a formal presentation of the problem, the authors provide a simple decision rule indicating where to allocate effort under given circumstances. The optimal strategy turns out to be of an index type; i.e., each deposit is indexed by a certain number (a reservation price) depending on its current state, and at any time the deposit having the highest index should be worked on first. Then they examine the comparative statics of how the optimal schedule will change as a result of modifications in the problem data. They also consider the distortive effects of a nonneutral tax system and, finally, comment on the Norwegian tax regime. 6 references, 1 table.
- Research Organization:
- Chr. Michelsen Institute, Fantoft, Norway
- OSTI ID:
- 6208542
- Journal Information:
- Energy J.; (United States), Vol. 6
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
29 ENERGY PLANNING
POLICY AND ECONOMY
NORWAY
PETROLEUM DEPOSITS
OFFSHORE DRILLING
RESOURCE DEVELOPMENT
OPTIMIZATION
TAXES
ECONOMIC IMPACT
DRILLING
EUROPE
GEOLOGIC DEPOSITS
MINERAL RESOURCES
RESOURCES
SCANDINAVIA
WESTERN EUROPE
020700* - Petroleum- Economics
Industrial
& Business Aspects
021000 - Petroleum- Legislation & Regulations
290500 - Energy Planning & Policy- Research
Development
Demonstration
& Commercialization
294000 - Energy Planning & Policy- Fossil Fuels
290200 - Energy Planning & Policy- Economics & Sociology