11/ One of our main recommendations: Why not harness market forces to actually divine fair market value for these potentially lucrative oil and gas resources? That pre-1983 system led to substantial competition and worked well. Twitter Search / POGOBlog https://twitter.com/POGOBlog/status/966687813910573056 security exchange commission
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10/ POGO has recommendations for how to better ensure the public gets “fair market value” for its offshore resources. pic.twitter.com/8Ftjj6bZqZ Twitter Search / POGOBlog https://twitter.com/POGOBlog/status/966687806809673729 security exchange commission 9/ Well, it turns out that over the last 20 years, nearly 70% of tracts that were ultimately energy-producing had initially been classified as nonviable—that is, worthless. It takes work to determine the valuation of a tract, and the government often doesn't do so. pic.twitter.com/MnOBJu7Csd Twitter Search / POGOBlog https://twitter.com/POGOBlog/status/966687804423057408 security exchange commission 8/ Another wrinkle: The government assesses tracts of seafloor up for auction as viable or nonviable—having the potential for profitable production when drilled, or not. We noticed companies often bid on & win nonviable tracts. What do they know that the government doesn't? Twitter Search / POGOBlog https://twitter.com/POGOBlog/status/966687803194118145 security exchange commission 7/ We found that when there are so many tracts up for auction, there’s virtually no head-to-head bidding, so companies can get drilling rights at bargain-basement prices. pic.twitter.com/sIn0asnuRg Twitter Search / POGOBlog https://twitter.com/POGOBlog/status/966687799675097090 security exchange commission 6/ Our analysis shows that revenues from offshore leasing never recovered. The public has received tens of billions less in revenue since the 1983 policy change, compared to the decades before. pic.twitter.com/5bgRUiwbBL Twitter Search / POGOBlog https://twitter.com/POGOBlog/status/966687797401870336 security exchange commission 5/ “Area-wide leasing” led to a falloff in competition and a huge drop in revenue taxpayers received for offshore leases. Just 2 years after the switch, public revenue from lease auctions had dropped by billions of dollars. Twitter Search / POGOBlog https://twitter.com/POGOBlog/status/966687796097372160 security exchange commission 4/ The government is required by law to use use "competitive bidding" and to obtain "fair market value" when companies lease public land to drill on. But that rarely happens: Decades of data suggest the government has been falling down on the job. Twitter Search / POGOBlog https://twitter.com/POGOBlog/status/966687794964901889 security exchange commission 2/ To tell this story we go back to 1983, when, thanks in part to oil industry lobbying, the Reagan administration started "area-wide leasing": putting up for auction huge areas of outer continental shelf seafloor, a shift from the previous practice of leasing out small subsets. Twitter Search / POGOBlog https://twitter.com/POGOBlog/status/966687790829359104 security exchange commission 3/ In order to drill for oil/gas offshore, energy companies lease tracts of seafloor from the government, since that seafloor and the oil below are public resources—that is, owned by the American public. pic.twitter.com/iZhp39nVXR Twitter Search / POGOBlog https://twitter.com/POGOBlog/status/966687792054067200 security exchange commission |
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