Offshore Oil Royalties and Tar Sands-who need's incentives?
Bravo for life's little ironies! The front page of the New York Times today talks about how oil companies have avoided paying royalties on offshore wells, a program that was put in place to support exploration when prices were low. Supporters say it has no cost to the government and is encouraging additional exploration-wrong! Meanwhile, the Wall Street Journal today writes about exploration in Canada's tar sands-it doesnt get much more expensive than that. If companies can afford to explore the tar sands, then d'oh--we dont need to incentivize further US exploration by forgoing royaties. At these prices, companies have all the incentive they need. More on tar sands later.