Abstract
The domestic crude oil industry has been the object of much legislation and presently operates under (a) state production restrictions (prorationing), (b) federal controls (the Connally Hot Oil Act prohibits interstate commerce in oil and oil products that have been produced in violation of state prorationing laws), and (c) special tax considerations (percentage depletion). Prorationing and the Connally Act are expressions of a public policy which has emerged because the free competitive market has been unable to perform its primary function of husbanding existing oil reserves; while percentage depletion is often justified by arguing that in the absence of this tax provision, the free market would not allocate sufficient resources to exploration for new oil reserves.
American Economic Review, 53, 1963. The author is indebted to S. Weintraub, F. G. Adams and E. Smolensky for helpful comments on an earlier draft.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
American Petroleum Institute (1961) History of Petroleum Engineering, (New York).
Cassady, R. (1954) Price Making and Price Behavior in the Petroleum Industry, (New Haven: Yale University Press).
DeChazeau, M. G. and Kahn, A. E. (1959) Integration and Competition in the Petroleum Industry, (New Haven: Yale University Press).
Dirlam, J. B. (1961) ‘The Petroleum Industry’, in W. Adams (ed.), The Structure of American Industry, 3rd edn (London: Macmillan).
Harberger, A. (1955) ‘The Taxation of Mineral Industries’, in Federal Tax Policy for Economic Growth and Stability, (Washington) pp. 439–49.
Keynes, J. M. (1936) The General Theory of Employment, Interest and Money, (New York: Harcourt Brace).
McKie, J. W. (1960) ‘Market Structure and Uncertainty in Oil and Gas Exploration’, Quarterly Journal of Economics, 74 (November) pp. 543–71.
McKie, J. W. and McDonald, S. L. (1962) ‘Petroleum Conservation in Theory and Practice’, Quarterly Journal of Economics, 76 (February) pp. 98–121.
Neal, A. C. (1942) Industrial Concentration and Price Flexibility, (Washington: American Council on Public Affairs).
Rostow, E. (1948) A National Policy for the Oil Industry, (New Haven: Yale University Press).
Saunders, T. P. (1940) ‘Low Producing Rates Waste Reservoir Pressures’, Oil and Gas Journal, 39 July, p. 66.
Uren, L. C. (1953) Petroleum Production Engineering — Oil Field Exploitation, (New York: McGraw-Hill) 3rd edn.
Uren, L. C. (1950) Petroleum Production Engineering — Petroleum Production Economics, (New York: McGraw-Hill).
US Congress (1959) Committee on Ways and Means, Compendium of Papers on Broadening the Tax Base, (Washington).
US Congress (1956) Joint Committee on the Economic Report, Hearings on Federal Tax Policy for Economic Growth and Stability, (Washington).
Editor information
Copyright information
© 1991 Paul Davidson
About this chapter
Cite this chapter
Davidson, P. (1991). Public Policy Problems of the Domestic Crude Oil Industry. In: Davidson, L. (eds) Inflation, Open Economies and Resources. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-11516-7_22
Download citation
DOI: https://doi.org/10.1007/978-1-349-11516-7_22
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-11518-1
Online ISBN: 978-1-349-11516-7
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)