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U.S. Department of Energy
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Essays on the taxation of oil and natural gas

Thesis/Dissertation ·
OSTI ID:6699652

The dissertation contains three essays on taxation and other governmental policies affecting oil and natural gas production. In the first essay, the welfare cost of taxing an exhaustible resource is analyzed. The analyses suggest that the deadweight loss associated with the distortionary tax is smaller if the resource is exhaustible and domestically-owned; this suggests further that exhaustible resources should be taxed relatively heavily and has implications regarding the welfare gain from such policies as oil price decontrol. In the second essay, several contributions are made to auction theory, particularly as it relates to collision and to the use of minimum prices. These results are combined with other parts of the literature on auctions and contracts which have not previously been applied to oil lease auctions. Together, they suggest a structure for oil lease auctions quite different from that currently recommended theoretically. The third essay examines the optimal structure of resource contracts when the government is a party to the agreement but future governments cannot be bound by its terms. The potential developer is assumed to perceive that there is a probability of future expropriation which is an increasing function of net cash flow and a decreasing function of future taxes.

OSTI ID:
6699652
Country of Publication:
United States
Language:
English