Editor Note: This post complements a previous entry at MasterResource by Guillermo Yeatts,
Subsoil Oil and Gas Privatization: Private Wealth for the Common Good.]
Government intervention in free markets is prefaced on market failure. But no such rationale explains why federal and state governments have owned and managed hydrocarbon-bearing onshore and offshore lands. Government involvement can be explained by little more than the historical precedent of sovereign ownership of unowned property and of habit.
In a private property world, surface and subsurface areas would be unowned until the positive acts of discovery and intent to use. Under the “homestead” theory of first property title, the state of nature (unowned area) would not be the property of government but the first resource entrepreneur who, in the immortal words of John Locke, “tills, plants, improves, cultivates and can use the product of” the surface or subsurface to “enclose it from the common.”…