Federal Decisions and Industry Participation: The Case of Offshore Oil Leasing

摘要

Prior empirical work in the economics of offshore oil and gas leasing assumes the ocean area offered by the US government for leasing to be given. Analysis typically proceeds by examining the firms' behavior in bidding and operating on the area offered. The present research looks at the decision made by the government to offer or withdraw specific parcels (called blocks) from the leasing process. The choices by firms to bid upon the offered-set of blocks are then examined. The key linkage between the decisions appear to be the expected environmental damage associated with exploiting the block. The paper begins with a background section, which briefly outlines the leasing process, examines the role of environmental information, and places the present work in the context of the literature. Section 2.0 provides a conceptual model of the federal offering decision and the industry bidding decision. The next section provides a case study and associated empirical analysis. A summary and conclusion are then given. 30 refs., 3 figs., 3 tabs. (ERA citation 13:002860)