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An Assessment of the Effects of the Windfall Profits Tax on Crude Oil Supply

Philip K. Verleger, Jr.

Year: 1980
Volume: Volume 1
Number: Number 4
DOI: 10.5547/ISSN0195-6574-EJ-Vol1-No4-3
View Abstract

Abstract:
Most economic assessments of the recently enacted crude oil "windfall profits tax" (P. L. 96-223) have concluded that the tax will reduce the economic incentive to produce crude oil and will therefore have a negative impact on U.S. oil production.' This article disagrees with that view. Instead we show that the tax offers incentives to producers on existing properties that exceed those offered by a free market. Furthermore, based on estimates of these incentives, we conclude that the tax will1. See, for instance, Mead (1979) Wall Street Journal (1980), and Friedman (1980).Support from grants to the program on business and government relations at the School of Organization and Management at Yale University is gratefully acknowledged. Extraordinary assistance from Edward Erickson and Linda Scotten in improving the exposition of this paper is also gratefully acknowledged. The author assumes full responsibility for any errors.



Taxation of Oil and Gas Revenues of Four Countries

John Helliwell, Philip K. Verleger, Jr., John Mitchell, Thomas R. Stauffer, James S. Moose, John F. Helliwell

Year: 1982
Volume: Volume 3
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol3-No2-2
View Abstract

Abstract:
Energy taxation is more complex and more controversial in Canada than in most or all other countries, for three main reasons. First, under the constitution, most natural resources are owned by the provinces, with important powers of regulation and taxation in the hands of the provincial and federal governments. Second, energy resources are very unevenly distributed among the provinces. Alberta, with less than 10 percent of Canada's population, accounts for 85 percent of Canada's nonfrontier onshore crude oil and natural gas. Finally, the Canadian oil and gas industry is largely foreign-owned and foreign-controlled.



British and American Tax Treatment of U.K. North Sea Oil Fields

James S. Moose

Year: 1982
Volume: Volume 3
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol3-No2-3
View Abstract

Abstract:
In its quest for additional revenue, the U.K. government has made a major change in the taxation system for North Sea oil fields. A new tax, the Supplementary Petroleum Duty (SPD), has been introduced, and the terms of the Petroleum Revenue Tax (PRT) have been tightened. The new tax system was introduced in March 1981 but was effective as of January 1, 1981. The new system has been criticized on the basis that it would substantially reduce the incentives to develop smaller fields and that it tends to discriminate against U.S. oil companies. This paper examines these criticisms. It analyzes the economics for a U.K. company of developing an oil field by field size. It then shows the changes in these economics created by the new U.K. taxation system. The final section of the paper deals with the interrelationship between the U.S. and U.K. tax treatments of North Sea oil.



Risk-Bearing and the Choice of Contract Forms for Oil Exploration and Development

Charles R. Blitzer, Donald R. Lessard, and James L. Paddock

Year: 1984
Volume: Volume 5
Number: Number 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol5-No1-1
View Abstract

Abstract:
The structure of taxes and fiscal contracts between host countries and foreign companies has major implications for the success of oil development projects. This is because of several key characteristics of such projects: large investment outlays, long lead times to project completion, and long periods of project output and payout. These characteristics usually are coupled with an incomplete sharing of information and technology, and significant differences in the ability of the various parties to bear the risks involved. These characteristics often lead to unstable contracts and, in many cases, to the failure to develop projects that are economically attractive in aggregate terms but unattractive to one or both parties because of uncertainties over sharing project risks and returns.



Effectiveness of Building Energy Performance Standards to Curtail Household Energy Demand: A Theoretical Analysis

Vijay K. Mathur

Year: 1984
Volume: Volume 5
Number: Number 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol5-No1-6
View Abstract

Abstract:
The Congress of the United States enacted the Energy Conservation and Production Act in 1976. It was amended in 1977. Title III of this act is designed to implement policies to curtail energy demand associated with new buildings; Title IV is aimed at establishing policies to encourage energy conservation in existing buildings. The main purposes of both Titles are to curtail energy consumption on the part of households as well as commercial buildings. The purpose of this paper is to analyze the effectiveness of various policies, which may be followed by the government under this Act, for curtailing the energy use by the households. Although no comprehensive energy policy to meet this goal has yet been formulated, the purpose of the Act gives a clear indication about the type of policy that could eventually emerge. My intention is not only to examine the effectiveness of the policy or policies emerging from the above Titles, but also to compare them with alternate, albeit traditional, policies of pricing, taxes, and subsidies aimed to reduce energy demand.



Are Federal Energy Tax Credits Effective? A Western United States Survey

Edwin H. Carpenter and S. Theodore Chester, Jr.

Year: 1984
Volume: Volume 5
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol5-No2-10
View Abstract

Abstract:
The residential energy credit provided by the federal Energy Tax Act (1977) cannot be carried beyond December 31, 1987, and the Reagan administration has indicated a disinclination to support an extension of its provisions, in either its current or an altered form. Its likely demise indicates nothing about the Act's effectiveness in getting homeowners to invest in energy conservation or solar devices. Rather, it is a reflection of the Reagan philosophy of letting market conditions determine energy conservation decisions. Since the administration is not explicitly passing judgment on the success or failure of residential tax credits, important questions regarding their efficacy remain to be answered. This paper will attempt to shed light on this question. It will examine data derived from a random sample of Western United States homeowners to determine awareness and use of the federal energy tax credit; the role of climate and dwelling type; and the influence of selected socioeconomic factors on the use of energy tax credits. Most important, it will seek to determine the extent to which conservation decisions were contingent on the availability of the tax credits, i, e., what proportion of investments were made wholly or predominantly because of their special tax inducements and what proportion would have been made in any case.



Energy Taxes and Optimal Tax Theory

Michael J. Boskin and Marc S. Robinson

Year: 1985
Volume: Volume 6
Number: Special Issue
DOI: 10.5547/ISSN0195-6574-EJ-Vol6-NoSI-2
No Abstract



Canadian Oil and Gas Taxation

Campbell Watkins and Brian Scarfe

Year: 1985
Volume: Volume 6
Number: Special Issue
DOI: 10.5547/ISSN0195-6574-EJ-Vol6-NoSI-3
No Abstract



The Resource Rent Tax in Australia

Paul G. Bradley

Year: 1985
Volume: Volume 6
Number: Special Issue
DOI: 10.5547/ISSN0195-6574-EJ-Vol6-NoSI-4
No Abstract



The Coming Age of Energy Taxes and Environmental Levies

Hans-Jochen Luhmann

Year: 1985
Volume: Volume 6
Number: Special Issue
DOI: 10.5547/ISSN0195-6574-EJ-Vol6-NoSI-5
No Abstract




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