Economist Ben Zycher reveals the “perversities, problematic assumptions, and wasteful outcomes made inevitable by the contradictions and incoherence of the Biden leasing policy.” Biden just announced a policy of allowing new leases but charging higher royalty rates.
Here’s a summary of Zycher’s observations about this policy:
- The Biden administration will start leasing on 80 percent less land than the industry sought, and 90 percent of it is in Wyoming.
- The higher leasing rate will reduce the amount bidders are willing to pay for the initial lease.
- Shifting costs from initial bid to leasing shifts risks to the taxpayer—if returns are poor, the government will receive less tax.
- The temperature impact of reducing carbon dioxide emissions from these changes in oil leasing policy is “virtually undetectable.”
- The administration’s claim that the raise in leasing rates merely brings the price up to private and state rates is “disingenuous” because private owners and state owners do not take up a year to go from leasing to permitting. (Time is money, Zycher reminds the Biden administration.)
Zycher, a senior fellow at the American Enterprise Institute, also observes that that there is no climate crisis; the world’s grain and vegetable production is benefiting from more carbon dioxide; and fewer people are dying because it’s warmer, not colder. These points have been supported by scientific studies.
Image of Wyoming pump is by mypubliclands and licensed by Creative Commons: CC BY 2.0.