EXCERPT FROM: "Oil and Gas Leasing on the OCS: a Study in Pseudo-Socialism"
by Mason Gaffney, 1983; rev. 2/93
Paper delivered at Annual Conference, Western Tax Association, Queensway Bay Hilton, Long Beach, CA, June, 1983
B. Timing lease sales
Sales need to be deferred until the lands are economically "ripe," from the seller's viewpoint. Ripeness, roughly speaking, is a condition when the growth rate of value over time falls to equal or less than the interest rate. "Value," in this context, is the anticipated high bid. The tendency today is to time sales by industry "nominations," meaning at the convenience of certain powerful members of the industry. These may well be firms that have a lead in exploring a certain frontier area, and a competitive edge to exploit before other firms know as much as they. Even if several firms are involved, every member of the group would like to get in on the steep part of the growth curve, meaning growth of value.