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Discussion: (17 comments)

  1. One thing I’ve seen discussed very little in relation to the US boom in onshore unconventionals (“shale” oil and gas) is the extent to which the key enabler isn’t technology (everyone has access to the technology), nor is it the geology (similar formations exist elsewhere in the world). It’s property rights.

    The US is very nearly unique in that individual land owners also own the underlying mineral rights. This has allowed basins like the Permian, Bakken and Eagle Ford to be developed in a bottom-up, Hayekian manner, rather than in a top-down manner by a large national oil company.

    There is certainly a lesson in this.

    1. Thanks, I will be posting something about that issue very soon.

    2. This actually works in two ways, one property owners benefit, and secondly since the local community benefits from the property taxes generated on the leases, there is much less local opposition as compared with where the revenues go only to the central government and there is no benefit to local folks. In many countries in Europe the folks where the shale lies see drilling as just a way to make life rougher (traffic, destroyed roads, if a boom happens runaway housing prices…) They don’t see any direct benefit to themselves or their community so they oppose it because there is no local upside and great local downside.

    3. Excellent point. I’m up in Canada where most the mineral rights are held by the Crown and you really see the difference in pace of development. Hard to blame the landowners though because if you’re not getting a piece of the action its hard to accept a pumpjack and perhaps a compressor a few hundred yards from your house. What they’re paid in yearly surface lease rentals doesn’t come close to justifying the hassle

  2. Citizen Buddy

    I thought the Permian was growing faster with higher production per well then it is — but it is about 95% oil with a little nat gas and liquids.

  3. Yeah, but if you listened to the conference calls and read the 10-Ks on the Vangle Group as I had, You’d all realize Mr. Vangle Wangle’s blabbermouthing was as real and sustainable as that doom day cult known as the Oil Drum.

  4. Benjamin Cole

    And we spent or incurred liabilities of $3 trillion in Iraq for…oil? Now, there are 3.7 million citizens getting monthly disability checks…from the VA.
    Is the federal government ever the answer, to domestic or foreign “problems” ?

    1. Citizen Buddy

      Benji, get off it. Go enjoy your day of freedom and liberty, fought for on your behalf, against enemies eager to deploy their armaments to do you harm on behalf of blood thirsty potentates.

    2. Hey you finally upped the number, good going, at least you are paying attention now.

      Now if we could get those folks off of SSA disability as well, close down HUD and the Department of Education, we would have only half the deficit.

      1. The entitlement deficits (medicare, medicaid, social security) IS the deficit now. Check out my blog “Stabilize Our Entitlement Programs!” at http://gulfcoastcommentary.blogspot.com/2013/10/protect-social-security-and-medicare.html

        1. Yeah, but I still thing DOEd and Hud could be closed, save 60 billion or so, and then cut the Disability in half, save another 60 billion or so. And even Benji’s favorite program Vet disabily could use a bit of trimming, say 5 billion there.

          But agreed it is the overpromised Medicare, and the theft of funds from SSA that are really going to kill us.

        2. Doug

          So, let’s ignore, just for the moment, the moral issue of forcing redistribution of income from current workers trying to build wealth to retired workers who have already done so.

          What effect do you think adding 10.6% to the cost of labor would have on businesses and overall economic activity in the US?

          Or conversely what do do you imagine the effect of reducing workers total incomes by 10.6% would have on businesses and overall economic activity in the US?

          As you are an MBA in economics I’m sure you’re aware of the dishonest trick being played on workers by claiming that employers pay half of FICA taxes, when in reality those taxes are all part of the overall cost of labor. Do you think current workers will be OK with paying 25.8% of their earnings to retirees?

          1. The blog is a bit ‘tongue and cheek’ to show how out of whack the entitlement system is. Medicare also had a trust fund that’s degenerated into a “pay as you go” arrangement but it’s actually “not paying as we go.” The blog is an effort to start a conversation about benefit levels and how ridiculously high payroll taxes would have to rise to pay them both now and the future. Obviously benefit levels will have to drop. Someone’s got to say it at some point!! Right now, everyone have their heads in the sand. Thanks!!

          2. Doug

            Well, you got me. The blog looks serious, and I suspect many folks would agree wholeheartedly that FICA contributions should be raised to cover benefits.

            I would like to see those programs phased out, replaced by voluntary retirement and medical savings plans, but I don’t think that’s going to happen.

  5. Benjamin Cole

    Citizen Buddy and Marque 2-

    I pay taxes for my mercenary military. Remember? No draft, no volunteers. A professional military (and expensive too).

    If you think our military/NSA/VA has preserved our freedoms, then thank me and other taxpayers and productive citizens and businesses. Economically speaking, militaries the world over are parasites. We taxpayers foot the bill.

    Marque2-

    I would be happy to eliminate the USDA, HUD, VA, Commerce, Education and Labor Departments. Maybe a couple of more I can’t think of now. Radical cutbacks in NSA/military outlays.

    1. If you think our military/NSA/VA has preserved our freedoms, then thank me and other taxpayers and productive citizens and businesses.

      You’re so ignorant, Benji. You’ve never spent a moment in uniform so you don’t know what you don’t know. Whatever small chunk of change you’ve paid in is absolutely nothing compared to the sacrifices of military life.

      “Thank you.” Pffftttt.

  6. Chris Stevens

    Great article. I would really like to post it on LinkedIn but the feed is not translating there. I only get the website header…

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