Environmental and Land Use Regulation in Nonrenewable Resource Industries: Implications from the Wyoming Checkerboard

This paper examines how the oil and soning that these effects should be similar gas industry responds to changes in environmental to those of production and property taxes. and land use regulations pertaining to drilling by Like Stollery, however, they do not conexamining differences in regulatory practices on sider the situation where environmental federal and private land. A simulation model for regulations directly affect explo ration and Wyoming is used to estimate losses of oil and gas development output over the next 60 years because of higher activities. In any case, the drilling costs found on federal property. The pres- limited number of studies in this area and ent value of these losses comes to about $800 mil- their narrow scope is surprising in light of lion. A lso, this case study is of interest because it the importance of environmental complishows that future production is more sensitive to ance costs to firms that produce from nonchanges in environmental regulations that apply to renewable resources and because of the drilling than to changes in severance taxes levied observation by Jaffe et al. (1995) that a on production.